Will there ever be any monetary incentives to run a full node?

[ranochigo]

As a matter of fact, investigating pooling pressure and mining centralization threats in bitcoin I've become convinced that an affirmative approach to the above question is inevitable in the framework of any solid solution to the core problem of mining centralization.

I don't see how paying full nodes some sort of reward for running could have any effects on mining and mining pools. That just adds an additional reason to centralized another aspect of bitcoin (running a full node) and if we assume there were any centralization in mining the same entities would also run full nodes and take the control in that area also.

I didn't suggest that, paying rewards to full-nodes. I'm just reminding the fact that the main incentive behind running a full node was designed to be a strict requirement for participating in mining which is absolutely omitted with the current situation in the scene. If instead of tens of pools we had thousands of miners actively generating their own blocks, i.e. in a truly decentralized mining scene the actual value of running a full node would have been discovered already. Decentralization of mining is the key to this problem.

Many businesses need full node, not only miners. Payment providers, exchanges, etc. And it's not so expensive to have one.

How many businesses uses their own full node and not a third party payment processor? How many exchanges are there? I don't think the count would be anywhere near the thousands.

If you're talking about the cost of having a full node, you can't simply estimate it based on the cost of the computer alone. You need to be able to have a interface that can be used to connect to your full node.

SPV clients and pooled mining has diminished the need for a full node.

[1714050076]

1714050076

[TofuDefi]

As a matter of fact, investigating pooling pressure and mining centralization threats in bitcoin I've become convinced that an affirmative approach to the above question is inevitable in the framework of any solid solution to the core problem of mining centralization.

I don't see how paying full nodes some sort of reward for running could have any effects on mining and mining pools. That just adds an additional reason to centralized another aspect of bitcoin (running a full node) and if we assume there were any centralization in mining the same entities would also run full nodes and take the control in that area also.

I didn't suggest that, paying rewards to full-nodes. I'm just reminding the fact that the main incentive behind running a full node was designed to be a strict requirement for participating in mining which is absolutely omitted with the current situation in the scene. If instead of tens of pools we had thousands of miners actively generating their own blocks, i.e. in a truly decentralized mining scene the actual value of running a full node would have been discovered already. Decentralization of mining is the key to this problem.

Many businesses need full node, not only miners. Payment providers, exchanges, etc. And it's not so expensive to have one.

How many businesses uses their own full node and not a third party payment processor? How many exchanges are there? I don't think the count would be anywhere near the thousands.

I think we talk about hundreds and maybe even thousands. There are 372 exchanges listed on coinmarketcap right now and I believe most of them running their own node.

If you're talking about the cost of having a full node, you can't simply estimate it based on the cost of the computer alone. You need to be able to have a interface that can be used to connect to your full node.

SPV clients and pooled mining has diminished the need for a full node.

Any Bitcoin Core wallet is a full node actually. I have one. And also run bitcoind on one of my servers. It uses about 300Gb of disk space, but I'm ok with that. It's affordable. TRON full node consumes much more resources for example.

[ranochigo]

I think we talk about hundreds and maybe even thousands. There are 372 exchanges listed on coinmarketcap right now and I believe most of them running their own node.

I definitely hope they are. Is 372 nodes enough? In the theoretical scenario of 1 CPU 1 Vote, the number of nodes would've be in the tens of thousands. Businesses don't usually run their own node, at least from what I've observed, most are using either coinpayments.net and bitpay. It's way easier to have a service do the payment for you.
 

Any Bitcoin Core wallet is a full node actually. I have one. And also run bitcoind on one of my servers. It uses about 300Gb of disk space, but I'm ok with that. It's affordable. TRON full node consumes much more resources for example.

IMO, disk space and internet bandwidth is scarce for the average joe. When alternatives like Electrum and other SPV wallets exists with little to no synchronization needed, most would choose them over a full node.

When alternatives that are better than running a full node exists, the average user won't run a full node. The tangible benefits is just too little.

[TofuDefi]

I think we talk about hundreds and maybe even thousands. There are 372 exchanges listed on coinmarketcap right now and I believe most of them running their own node.

I definitely hope they are. Is 372 nodes enough? In the theoretical scenario of 1 CPU 1 Vote, the number of nodes would've be in the tens of thousands. Businesses don't usually run their own node, at least from what I've observed, most are using either coinpayments.net and bitpay. It's way easier to have a service do the payment for you.

There are about 10000 nodes, I think it's enough. 1 CPU 1 Vote is about mining, not about full nodes.

If you accept small payments regularly and don't operate with significant amount of BTC then bitpay or coinpayments is ok for you, but if you need to keep a lot of btc and be sure that transactions you observe are real you need a full node, maybe even several of them.

Any Bitcoin Core wallet is a full node actually. I have one. And also run bitcoind on one of my servers. It uses about 300Gb of disk space, but I'm ok with that. It's affordable. TRON full node consumes much more resources for example.

IMO, disk space and internet bandwidth is scarce for the average joe. When alternatives like Electrum and other SPV wallets exists with little to no synchronization needed, most would choose them over a full node.

When alternatives that are better than running a full node exists, the average user won't run a full node. The tangible benefits is just too little.

I agree that for average Joe Electrum can be good enough, but there are still a lot of cases when full node is needed for businesses and even for regular users.

[pooya87]

If you accept small payments regularly and don't operate with significant amount of BTC then bitpay or coinpayments is ok for you, but if you need to keep a lot of btc and be sure that transactions you observe are real you need a full node, maybe even several of them.

I don't think using and preferring payment processors has anything to do with the amount, or at least it is not the biggest reason. It is all about whether the merchant wants to receive bitcoin or fiat while the user still pays in bitcoin. Due to volatility of bitcoin price those who start accepting bitcoin prefer receiving the payment in fiat.

[TofuDefi]

Regular user? If you mean privacy benefit, BIP 157 & 158 are enough for most users. Example wallet which uses it is Wasabi Wallet.

These BIPs are definitely improves privacy for light nodes, but if user's unencrypted transaction goes through third party full node then I think there is still an issue with privacy.

[ranochigo]

These BIPs are definitely improves privacy for light nodes, but if user's unencrypted transaction goes through third party full node then I think there is still an issue with privacy.

Transactions are never encrypted but yes, Electrum does have some privacy concerns. If you do want to protect your privacy, you'll probably be looking at Wasabi Wallet, Samourai Wallet etc. Their built in privacy functions is probably more useful for a user who wants impenetrable privacy.

I think you missed my 1 CPU 1 Vote argument. In the older days, mining requires a full node due to the pools being practically non-existent then and the profitability of a CPU was fairly decent. People are compelled to run a full node to mine because SPV wallets aren't really suitable for mining. Proliferation of ASICs and pools has also resulted in miners joining pools to have less earning varience as well as a higher reliability; they don't have to run full nodes to mine anymore. (Joining a pool would probably distort the 1 CPU 1 Vote ideology anyways, probably would have to run their own nodes)

Ideally, as many nodes as possible is the main goal. I haven't really found many businesses actually running their own full node. It's way easier to have a ready-made integration than to have to build the backend to handle transactions yourself. I'm not talking about those who are primarily dealing with Bitcoin transactions, but those merchants who see Bitcoin as an alternative form of payment and are likely not concerned about the disproportionate cost-benefit that having a full node would bring.

I understand that running a full node isn't all that bad but for a newbie who wants to use Bitcoin immediately and businesses who just wants to accept Bitcoin, is a getting a full node really their first choice?

[ABCbits]

Regular user? If you mean privacy benefit, BIP 157 & 158 are enough for most users. Example wallet which uses it is Wasabi Wallet.

These BIPs are definitely improves privacy for light nodes, but if user's unencrypted transaction goes through third party full node then I think there is still an issue with privacy.

How else would the full node broadcast user's (who use SPV wallet) transaction? If your concern is user's IP, Tor can solve the problem.
I know not everyone understand or use Tor (if it's not integrated and enabled by wallet), but it's more viable option than running full node.

[TofuDefi]

Regular user? If you mean privacy benefit, BIP 157 & 158 are enough for most users. Example wallet which uses it is Wasabi Wallet.

These BIPs are definitely improves privacy for light nodes, but if user's unencrypted transaction goes through third party full node then I think there is still an issue with privacy.

How else would the full node broadcast user's (who use SPV wallet) transaction? If your concern is user's IP, Tor can solve the problem.
I know not everyone understand or use Tor (if it's not integrated and enabled by wallet), but it's more viable option than running full node.

Ok, you're right, BIP 157 & 158  + Tor can solve the issue.

[GGUL]

Ideally, as many nodes as possible is the main goal.

  This is not a constructive or engineering approach. Any system has optimal parameter values, or an optimal range. An unlimited increase in a parameter is usually never required, and often leads to unnecessary costs, and the effect of the increase is close to zero.
 
  Therefore, it is more correct to set the goal in a different way: for Bitcoin to work reliably, the number of full nodes should not be less than a minimum level of N. Next, we need to find out the value of N, and ensure that the number of full nodes does not decrease below this level.

  Now we have ~10 thousand full nodes. It may well turn out that this is already above the minimum level and further increase does not give any profit for the entire system.

  You think that the number of full nodes should be increased. You could use the numbers to show what will improve in the system, and how much.

[ranochigo]

This is not a constructive or engineering approach. Any system has optimal parameter values, or an optimal range. An unlimited increase in a parameter is usually never required, and often leads to unnecessary costs, and the effect of the increase is close to zero.
 
Therefore, it is more correct to set the goal in a different way: for Bitcoin to work reliably, the number of full nodes should not be less than a minimum level of N. Next, we need to find out the value of N, and ensure that the number of full nodes does not decrease below this level.

Now we have ~10 thousand full nodes. It may well turn out that this is already above the minimum level and further increase does not give any profit for the entire system.

You think that the number of full nodes should be increased. You could use the numbers to show what will improve in the system, and how much.

Hmm good point, marginal utility usually decreases. Unfortunately I don't have a computer science degree so I won't be an expert in that area. I would love to see what's the optimum amount.

But the crux is that if you're not running a full node, you can't validate the info that you received and that is thus not ideal. I don't think that there would be an optimum number of nodes to have, having more nodes on the network doesn't decrease the experience for everyone else but it'll improve redundancy. You can have 100 nodes for the network to work but the degree of redundancy would be low. Since they aren't compensated, there shouldn't be any cost borne by anyone else?

[GGUL]

But the crux is that if you're not running a full node, you can't validate the info that you received and that is thus not ideal.

A properly implemented SPV client is as reliable as a full node. I don't know why, but this myth about the unreliability of SPV clients is very common in the Bitcoin community. Even more surprisingly, this myth is spread by Bitcoin developers.

I don't think that there would be an optimum number of nodes to have, having more nodes on the network doesn't decrease the experience for everyone else but it'll improve redundancy. You can have 100 nodes for the network to work but the degree of redundancy would be low. Since they aren't compensated, there shouldn't be any cost borne by anyone else?

The question of whether to use a full node or not is primarily a question of convenience (not even reliability). Each user decides for themselves. How many users decide to launch a full node, so many of them will be.

You decided that there should be as many full nodes as possible, and you should make an effort to increase their number. However, you do not provide any figures confirming this.

If, for example, you decide to compensate the owners of full nodes at the expense of miners, this directly reduces the security of Bitcoin. This raises the question of how optimal a solution would be to increase the number of full nodes by reducing security.

[aliashraf]

A properly implemented SPV client is as reliable as a full node. I don't know why, but this myth about the unreliability of SPV clients is very common in the Bitcoin community. Even more surprisingly, this myth is spread by Bitcoin developers.

This debate is not about reliability. SPVs are simply pure consumers in a network that have no role in consolidating it while this network happens to be in the verge of an alarming centralization situation.
A properly implemented SPV wallet as you've already put it, is reliable enough for the average user of bitcoin as much as bitcoin network is but the million dollar question would be how much is that?

To have a deeper understanding of the importance of full-nodes you need to take another look at User Activated Soft Forks, UASFs, and the role they play in balancing the power relations in bitcoin ecosystem. Without a strong base of full-nodes bitcoin will be left in hands of a dozen of Chinese pools and ASIC manufacturers who are established entities under the ruling of Xi and his party.

Ethereum community doesn't worry about pools they have Buterin and Ethereum Foundation and their weird understanding of governance in cryptocurrency universe, bitcoin is not Ethereum though, Core Devs have no say on the fate of the network, they are not co-ordinated/hired by a central entity, none of them is worshiped as an idol or a rock star, bitcoin is not a project and doesn't have a so-called "road map". In bitcoin, we need full nodes to keep the network safe and secure, in Ethereum all they need and all they got is Buterin and his Foundation, period.

If, for example, you decide to compensate the owners of full nodes at the expense of miners, this directly reduces the security of Bitcoin. This raises the question of how optimal a solution would be to increase the number of full nodes by reducing security.

You've argued the same way above thread, questioning the engineering tabulations and analysis behind the concerns about the number of full nodes.

To be more specific, engineers are not inventors or innovators of mathematical models, they simply use established models. Cryptocurrency is a young field of study and I'm not aware of any textbook touting a related mathematical model to this specific problem but community members have every right to be concerned about the number of full nodes in the network and discuss options to boost this number because as @ranochigo has argued correctly (and you have debunked using a straw-man fallacy) there is no penalty paid for such an increase, forget about rewarding full nodes.

[GGUL]

A properly implemented SPV client is as reliable as a full node. I don't know why, but this myth about the unreliability of SPV clients is very common in the Bitcoin community. Even more surprisingly, this myth is spread by Bitcoin developers.

To have a deeper understanding of the importance of full-nodes you need to take another look at User Activated Soft Forks, UASFs, and the role they play in balancing the power relations in bitcoin ecosystem. Without a strong base of full-nodes bitcoin will be left in hands of a dozen of Chinese pools and ASIC manufacturers who are established entities under the ruling of Xi and his party.

I really want to understand the "importance of full nodes". The problem is that apart from the words about importance, you have nothing else.

Let's assume that we have full nodes in the amount that is sufficient for the full operation of all users and the system. Let it be 5 thousand.
 After that, we will increase the number to 10 thousand. What will we get? The answer I came up with after much thought: NOTHING.

If you want to convince me otherwise, you'd better provide something real, preferably with numbers. Your arguments about UASF and the Chinese pools look ridiculous and unconvincing, and very similar to FUD  .

Ethereum community doesn't worry about pools ...

Surprisingly, as far as I know, no cryptocurrency is worried about the number of full nodes. Only Bitcoin. Maybe it's because all the excitement about it is pointless, and does not bring any benefit.

You've argued the same way above thread, questioning the engineering tabulations and analysis behind the concerns about the number of full nodes.

Where are these ''engineering tabulations and analysis"?  I'd like to see them.

[aliashraf]

A properly implemented SPV client is as reliable as a full node. I don't know why, but this myth about the unreliability of SPV clients is very common in the Bitcoin community. Even more surprisingly, this myth is spread by Bitcoin developers.

To have a deeper understanding of the importance of full-nodes you need to take another look at User Activated Soft Forks, UASFs, and the role they play in balancing the power relations in bitcoin ecosystem. Without a strong base of full-nodes bitcoin will be left in hands of a dozen of Chinese pools and ASIC manufacturers who are established entities under the ruling of Xi and his party.

I really want to understand the "importance of full nodes".

I challenge that claim. You don't try enough I suppose.
Look at the time stamps of my comments and yours, apparently you haven't "wasted" your valuable time reading my post, let alone chewing it, instead you prefer rushing to the KB and rehashing your nonsense argument about the need for numbers. Why don't you give us some magical numbers you got?  

Surprisingly, as far as I know, no cryptocurrency is worried about the number of full nodes. Only Bitcoin. Maybe it's because all the excitement about it is pointless, and does not bring any benefit.

Not surprisingly, the shit coins you are bragging with them, are orders of magnitude behind bitcoin.

[GGUL]

I really want to understand the "importance of full nodes".

I challenge that claim. You don't try enough I suppose.
Look at the time stamps of my comments and yours, apparently you haven't "wasted" your valuable time reading my post, let alone chewing it, instead you prefer rushing to the KB and rehashing your nonsense argument about the need for numbers. Why don't you give us some magical numbers you got?  

I already gave above. NOTHING. Or 0 if translated to numbers. This is how much users will get if they increase the number of full nodes beyond the number that is necessary for the system to function.
I am waiting for a rebuttal, waiting for your numbers, which show how much we will get.

[odolvlobo]

Let's assume that we have full nodes in the amount that is sufficient for the full operation of all users and the system. Let it be 5 thousand.
 After that, we will increase the number to 10 thousand. What will we get? The answer I came up with after much thought: NOTHING.

Without a concrete measure of the value of a node and a way to determine how many are sufficient or if any number is sufficient, it is impossible to say with any certainty that any particular number is sufficient or that any additional nodes provide no value.

It is reasonable to assume that an additional node provides additional benefit simply because it increases the connectivity of the network. It is not reasonable for you to make your claim (that at some point additional nodes provide no benefit) without supporting it.

Here, I'll help you. It could be argued that an additional node provides benefit at a cost, and the point at which the cost exceeds the benefit is where additional nodes no longer provide a benefit. Now, if you wanted to support your claim, you would need to identify the cost and show how it can outweigh the benefit after some number of nodes.

[GGUL]

Let's assume that we have full nodes in the amount that is sufficient for the full operation of all users and the system. Let it be 5 thousand.
 After that, we will increase the number to 10 thousand. What will we get? The answer I came up with after much thought: NOTHING.

Without a concrete measure of the value of a node and a way to determine how many are sufficient or if any number is sufficient, it is impossible to say with any certainty that any particular number is sufficient or that any additional nodes provide no value.

It is reasonable to assume that an additional node provides additional benefit simply because it increases the connectivity of the network. It is not reasonable for you to make your claim (that at some point additional nodes provide no benefit) without supporting it.

Here, I'll help you. It could be argued that an additional node provides benefit at a cost, and the point at which the cost exceeds the benefit is where additional nodes no longer provide a benefit. Now, if you wanted to support your claim, you would need to identify the cost and show how it can outweigh the benefit after some number of nodes.

You didn't read the terms very carefully. I'll help you.
"full nodes in the amount that is sufficient for the full operation of all users and the system"-means that there are no problems connecting to network.  And if there are no problems, adding additional nodes does not increase the ability to connect to the network.

Are you suggesting that it is impossible to estimate the number of full nodes that is sufficient for the network to function?
Now we have ~10 thousand full nodes. ~350 thousand transactions are added to the system every day. That is, on average, through each full node the system receives 35 transactions per day, or 1 transaction per 40 minutes.
And you think that 10 thousand full nodes can't handle it, that there may be problems connecting to the network. So, should we still increase the number of full nodes? Seriously?

[aliashraf]

Let's assume that we have full nodes in the amount that is sufficient for the full operation of all users and the system. Let it be 5 thousand.
 After that, we will increase the number to 10 thousand. What will we get? The answer I came up with after much thought: NOTHING.

Without a concrete measure of the value of a node and a way to determine how many are sufficient or if any number is sufficient, it is impossible to say with any certainty that any particular number is sufficient or that any additional nodes provide no value.

It is reasonable to assume that an additional node provides additional benefit simply because it increases the connectivity of the network. It is not reasonable for you to make your claim (that at some point additional nodes provide no benefit) without supporting it.

Here, I'll help you. It could be argued that an additional node provides benefit at a cost, and the point at which the cost exceeds the benefit is where additional nodes no longer provide a benefit. Now, if you wanted to support your claim, you would need to identify the cost and show how it can outweigh the benefit after some number of nodes.

You didn't read the terms very carefully. I'll help you.
"full nodes in the amount that is sufficient for the full operation of all users and the system"-means that there are no problems connecting to network.  And if there are no problems, adding additional nodes does not increase the ability to connect to the network.

Are you suggesting that it is impossible to estimate the number of full nodes that is sufficient for the network to function?
Now we have ~10 thousand full nodes. ~350 thousand transactions are added to the system every day. That is, on average, through each full node the system receives 35 transactions per day, or 1 transaction per 40 minutes.
And you think that 10 thousand full nodes can't handle it, that there may be problems connecting to the network. So, should we still increase the number of full nodes? Seriously?

It is both void and vague: full operation of all users and the system
There is no such thing in a decentralized p2p system as "full operation" you are an old hand in cryptocurrency, registered here in 2013 according to your profile, and yet you use  such a loose terminology, why?

Network could "function" (your term again) using just ONE full-node, but functioning is not the concern as you already know, being secure and safe is. Security is a not ever ending demand in all monetary systems and a decentralized system bases its security on proper distribution of power. It is what makes bitcoin the most secure in its clone is its checks and balances system that maintains a steady state of equilibrium between three important branches: miners, developers and users where the later group are presented solely by full-nodes (and not spv wallets) the concern discussed in this topic, which you are trying to derail, is the incentive mechanism behind running full-nodes and potentials to improve it.

If you are seriously questioning the philosophy behind the common rhetoric in bitcoin community that assumes an increase in the number of full-nodes is a good index and vice versa, you can start a topic and make your case. I suppose it is pretty off-topic to make this case here.

[The Sceptical Chymist]

There are 10987 full nodes according to bitnodes, so even if you pay a small potatoes amount of money like 0.00001BTC, after paying all those nodes you will be out by more than 0.1BTC every period. Nobody's willing to finance that.

10987 should be the current number of active full nodes accepting incoming connections. Just imagine how large this number will be when people get to know there are incentives for running a full node. I am quite sure this number would grow 10x times or more if incentivizing full nodes become true. So that would become around 1 BTC or more and obviously nobody would contribute that amount repeatedly.

Yeah, and none of that was Satoshi's intention when he created bitcoin anyway.

If you want to be compensated for maintaining a blockchain, proof-of-stake coins are your best option--or by running a masternode for coins like Dash, PIVX, etc.  Bitcoin isn't for that.

My technical knowledge of bitcoin has many gaps, and I appreciate everyone's responses here.  I learn good things in threads like this, even if I can contribute very little.