When it comes to blockchain resiliency, nodes matter.
A blockchain can’t function properly without them. And without a robust network of decentralized nodes a blockchain is at risk of being shut down.
Case in point is this week’s outage on Stellar, where the blockchain network stopped confirming transactions for two whole hours when a critical mass of nodes went offline.
Stellar has a surprisingly low number of nodes, considering it’s the eighth-largest cryptocurrency by market cap, with only around 110 full nodes. Even this number is misleading as Stellar’s nonprofit foundation manages a number of them and plays a critical role in acting as a “trusted” node in their consensus mechanism.
Many projects talk about decentralization and resiliency, but if you have just 110 full nodes, the majority of which are dependent on a single entity, this is the definition of centralization and fragility. The margin for error is simply too great to keep a node network that small up 100% of the time.
I’m often asked why Horizen is my favorite blockchain project. Obviously, there are a number of reasons, but high on the list is Horizen‘s robust node network. As Insiders should know by now, Horizen has the largest node network in the entire ecosystem, with over 20,000 full nodes. This is more than Ethereum, which has roughly 6,500 nodes, and even more than Bitcoin at roughly 9,400. Even more impressive, with Horizen none of the nodes are owned or operated by its legal entity, the Zen Blockchain Foundation.
Why does Horizen have so many more nodes than any other project? Simple, it economically incentivizes node operation. While Bitcoin and many other projects only provide automatic block rewards to miners, Horizen has split the block reward to include both secure node and super node operators. You don’t need a PhD in Economics to know that when you incentivize something you get more of it.
For a project that wants to avoid facing a critical outage like Stellar just did, it makes sense to take steps to expand its node network and ensure that not one group or individual controls a significant proportion of those nodes.
This is what a robust and decentralized system should like in practice.