You might have heard or read about Nodes before, but what exactly are Nodes? Why would someone invest in a NaaS project? What are the (future) benefits of Nodes?
With today’s article, we will try to give you a brief yet clear answer to these questions!
Nodes and Miners
As blockchains are decentralized, we need miners and nodes to basically allow a blockchain to function. First, let’s see what roles they have.
Are used to add and run transactions to and on the blockchain. Without miners, a large number of transactions wouldn’t be able to take place. We, therefore, need to pay fees for our transactions to ensure miners are incentivized to keep on mining.
To become a miner you need some serious gear that you then have to connect to a mining pool. Due to the increased popularity, mining has become a rather competitive business, meaning that significant mining rewards have been progressively more difficult to get.
Nodes form the foundation of the blockchain. They are the combined servers of every single one of you that shape the foundation and storage of blockchains. All nodes are perfectly connected to each other and communicate with each other forming a huge, continuously updated network.
What Nodes help achieve:
- Nodes save and store blocks of transactions or transaction history
- Nodes validate mined blocks based on their signature and authenticity
- Nodes then communicate all relevant information to all other Nodes.
The Growing Importance of Nodes
Although a growing number of Blockchain users equals a growing number of nodes, blockchains have found that further increasing the number of nodes has a positive impact on their blockchain. Resulting in a faster block validation process, verifying transactions, and storing updated copies of the blockchain.
With the growing number of miners there comes a growing demand for nodes. Therefore, various chains are slowly starting to incentivize people to start running nodes on their chains. For example, VeChainThor has a number of available Nodes that investors could buy. Buyers of these nodes are then rewarded in their native token $VET.
As with all growing demands, a lot of companies are born to provide the needed fitting solutions. This is what is currently happening concerning the provision of nodes. 3rd Parties have started to create their own huge node networks and provide these to blockchains who then pay them for this node service. These 3rd party node projects often have their own ecosystem based on their own token, shaped around this service, allowing investors to invest in the amplification of their network which they use to provide blockchains with nodes.
Nodes As A Passive Income
To compete against other 3rd party node suppliers, large reward pools are being introduced to incentivize people to invest in nodes. However, for now, nodes are often still pretty expensive, and as one cannot simply sell a node, the initial investment will basically be gone.
Which 3rd party do you need to choose to buy which node?
Now, this is a question that has been on the minds of a lot of new investors. Due to the high prices per node, there is not much room to experiment. Another problem means another demand.
A demand that VeNodes can satisfy. Our team consists of people who have been eyeballing all the developments in node-land since the start. With the sale of our collection of 3.333 VeNodes, we will be able to invest in a portfolio of well-researched nodes of the most durable available node suppliers with the highest future potential.
Buying a VeNodes NFT will therefore give you a % of the total amount of rewards that the node portfolio will generate. As a VeNodes NFT will cost about $333 in $VET it makes up for a significantly lower investment price than most of the available nodes. Besides, you will be able to sell your NFT on the VechainThor NFT market.
The Future Importance of Nodes
What will the future bring for Nodes?
Of course, this all depends on the crypto market in general. Will the market grow, then more nodes will be needed to validate block transactions. Will the market shrink, then a lesser number of nodes will be needed.
Nevertheless, the current growing need for nodes can be noted throughout all blockchains and will be an ongoing trend as a new way of passive income.