What Is a Blockchain Validator?

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Connor Brooke

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Connor Brooke

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Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also...

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November 29, 2024 11:50 EST

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Blockchain validators work behind the scenes to uphold the integrity of cryptocurrency networks. They’re like a team of guardians verifying transactions and maintaining a shared digital ledger – the blockchain.

When it comes to cryptocurrencies, every transaction must be scrutinized before being added to the blockchain’s permanent record. Validators use specialized software to confirm the legitimacy of these transactions and add new blocks to the chain. They make sure everyone follows the rules, and no one cheats.

Their work is crucial, especially in Proof-of-Stake (PoS) blockchains, where validators stake their own crypto as collateral. This ensures their commitment to honesty and accuracy. If they do their job well, they earn rewards — mistakes or dishonesty can cost them their stake.

What Do Blockchain Validators Do?

While we’ve answered the question of what is a validator in crypto, their responsibilities go well beyond just checking transactions.

Validators are the backbone of modern blockchain networks, especially ones that use PoS systems, where they replace miners from Proof-of-Work (PoW) systems.

Here’s a quick rundown of what blockchain validators do:

1. Propose new blocks
2. Check blocks proposed by others
3. Participate in network governance
4. Maintain network security
5. Ensure network efficiency

These tasks all work together to keep the blockchain running smoothly. Let’s explore two of the most important ones:

Creating and Checking Blocks

Validators take turns creating new blocks filled with recent transactions. They then broadcast these blocks to the network nodes, and other validators review them to ensure everything checks out. This process ensures that only valid transactions make it onto the blockchain.

Participating in Governance

In many PoS networks, validators vote on changes to how things operate. It’s like a blockchain democracy, with validators speaking up for what they think is best for the network.

By doing all this, validators contribute to the overall health of the blockchain:

• Security: Having to stake their own crypto acts as a deterrent against malicious behavior.
• Efficiency: PoS systems with validators are generally more energy-efficient than PoW systems, as they don’t need the massive computational power of mining.
• Scalability: With validators, networks can often process transactions quicker and handle more activity.

The Biggest Proof of Stake (PoS) Validators

Now that we know what blockchain validators do, let’s look at the best PoS cryptocurrencies. Each of these blockchains has its own way of handling validators.

Ethereum

Ethereum made headlines when it switched to PoS in 2022. To become a validator on Ethereum, users must stake 32 ETH. It’s not cheap, but as one of the most reputable chains, it attracts a large pool of validators looking to contribute to its security.

Cardano

Many consider Cardano the best crypto to buy for those who value an academic approach. Unlike Ethereum and Solana, Cardano doesn’t have a fixed minimum stake. Instead, it uses “stake pools,” where anyone can chip in. Running a stake pool, however, requires some serious tech know-how.

Polkadot

Polkadot focuses on connecting multiple blockchains through its unique parachain system. To become a validator, users must stake at least 350 DOT (varies with network conditions). Polkadot validators also play a critical role in maintaining the network’s shared security.

Avalanche

Avalanche stands out for its sub-second finality and high scalability. To become a validator, users must stake a minimum of 2,000 AVAX. Its unique consensus mechanism ensures a high level of decentralization while keeping transaction costs low.

Validator Rewards

Like we’ve mentioned, validators are key to keeping blockchain networks up and running, and they get rewarded for their efforts. Let’s check out how these rewards work.

Validators typically earn two types of rewards:

1. Block Rewards: These are tokens given for successfully adding a new block to the chain.
2. Transaction Fees: A portion of the fees that users pay for their transactions.

However, reward amounts can vary based on different factors, such as:

• Network activity
• Number of active validators
• Amount of crypto staked

But validation isn’t without its risks. Validators who slack off or try to cheat the system can face serious consequences. These range from temporary reward reductions to “slashing,” where they actually lose a chunk of their staked crypto.

Beyond slashing, validators also face risks like network downtime, which can disrupt their ability to earn rewards. Security breaches are another concern, as hackers often target validators with large holdings.

Ultimately, this mix of rewards and penalties keeps validators focused on securing the network. It’s also why some of the fastest-growing cryptocurrencies use a PoS setup.

How to Become a Blockchain Validator?

Thinking of becoming a blockchain validator? Let’s break down what it takes to run a validator node (also known as a crypto node).

First, what is a validator node exactly? It’s a computer that runs specialized software to take part in the blockchain network. Your node needs a reliable, high-speed internet connection and 24/7 uptime. While specs vary depending on the blockchain, expect to need at least 16GB of RAM and 1TB of storage.

On the financial side, requirements can be steep. As mentioned earlier, for Ethereum you’ll need to stake 32 ETH. Other networks have different requirements – some lower, some higher.

You’ll need some technical skills, too. Being comfortable with command-line interfaces (think coding) and basic server management is a must. Understanding blockchain technology and cryptography is also a big plus.

If you don’t have the funds (or skills) to go solo, you might want to join a staking pool, where you team up with others to combine your resources. Some networks even let you delegate your stake to existing validators. It’s a great way to get involved in staking without needing a massive initial investment.

Validators vs. Miners: What’s The Difference?

While both validators and miners work to secure the blockchain, they operate in different ways. Let’s break down the key differences between these two approaches:

Conclusion

Validators are essential to modern blockchains, ensuring they are secure, efficient, and decentralized. As we’ve seen, they’re not just transaction checkers, but active participants in keeping the network running smoothly.

Looking ahead, validators are probably going to become even more important. With energy use and scalability concerns, more blockchains are likely to adopt (or switch to) PoS systems. This could lead to new ways to validate transactions – making these networks even faster.

So, as blockchain technology gets used more and more, validators will remain important. They’ll help shape the future of DeFi, NFTs, tokenized real-world assets (RWAs), and all sorts of other exciting blockchain applications.

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