Personal Node vs Wallet: Which Is Better for Privacy and Security?

[yowbow]

Everything written below is my reasoning about whether or not it's worth using a full node, and perhaps it’s my misconception. The goal of this post is to understand my mistakes.

There are often videos online claiming that using your own personal node is more secure and confidential than using a regular wallet. I believe this is not the case, but I may be mistaken.

If we consider how a transaction is processed with a regular wallet versus a personal node, the process is as follows:

1. In the case of a wallet, the sequence is as follows:
    

• The wallet signs the transaction and sends it to public nodes. Public nodes can see the wallet's IP address and use it for further analysis.

           
2. In the case of a personal node, the sequence is as follows:
    

• The wallet signs the transaction and sends it to the personal node.
• The personal node forwards the transaction to public nodes. Public nodes can see the personal node's IP address and can use it for further analysis.

       
It is important to note that the primary goal of sending a transaction is its propagation across a large number of nodes. Therefore, from the perspective of privacy and security, there is no difference between using a personal node and a wallet.

When checking the balance, a wallet queries public nodes. Public nodes can see the wallet address. By analyzing the queried addresses, they can infer which wallets are associated with a specific IP address.  
In the case of a personal node, the situation is slightly different: the personal node receives all transactions and addresses, so public nodes cannot determine which wallets are linked to the personal node's IP address. In this scenario, the personal node has a small advantage over a regular wallet.

In any case, the connection can be protected with Tor to improve privacy and hide the IP address from public nodes.

The issue with a personal node is that it needs to be constantly online. If Tor is used, it could potentially be exposed faster than just a regular wallet. Additionally, since a personal node is online 24/7, it is more vulnerable to attacks. Furthermore, configuring and maintaining a personal node is more complex, which can lead to mistakes and vulnerabilities. A personal node also generates more traffic, which could potentially make it easier to identify and expose faster than a regular wallet.

[Cookdata]

When it comes down to privacy and wallet activities, every thing boils down to the end user. A user that has a personal node runs over tor can decide to reuse wallet address for transactions, that has broken whatever privacy you are hiding from public nodes, that person is as worse as a person that use a public node for many transactions.

However, if you use your wallet properly, along side with your personal node run over tor, it's considered as one of the best connections you will ever do for privacy transactions on Bitcoin if we don't bring mixers to the picture.

The issue with a personal node is that it needs to be constantly online. If Tor is used, it could potentially be exposed faster than just a regular wallet.

This is not accurate, personal node doesn't need to be online all the time. You can make it go offline, and online when you want to use it.

Additionally, since a personal node is online 24/7, it is more vulnerable to attacks. Furthermore, configuring and maintaining a personal node is more complex, which can lead to mistakes and vulnerabilities. A personal node also generates more traffic, which could potentially make it easier to identify and expose faster than a regular wallet.

Node can only be complex if you are running a public server as commercial nodes, personal nodes are not that complex and easy to run. Most often, attacks are limited compared to commercial nodes.

[DireWolfM14]

The personal node forwards the transaction to public nodes. Public nodes can see the personal node's IP address and can use it for further analysis.

And if the personal node connects through tor?  And since it's a node, are you taking into account that the transaction could have originated somewhere outside the IP address of the node?

Do yourself a favor, mister 6-post newbie.  Come here with an open mind, willing to learn.  Don't start out trying to educate the people who have a boatload more experience than you.

[BitMaxz]

It looks like it was copy-pasted from AI that tells you misinformation about having a node.
I'm not sure about if this content is AI, but one of the tools that I use detected this content as 100% AI. I know there are some checkers gives you false positives so...

Anyway, there are ways to protect your IP when running a node, and the person above me is right: you don't need to keep them running online while having a TOR setup. The only reason why you need the node to be always online is if you want to be fully synced. but you can set up the node in pruned mode with TOR if you don't want to leak the IP and then learn how to make an offline wallet and transaction to make sure your wallet is separated from the online device to avoid online attacks.

More info about TOR here: https://github.com/bitcoin/bitcoin/blob/master/doc/tor.md

[yowbow]

Do yourself a favor, mister 6-post newbie.  Come here with an open mind, willing to learn.  Don't start out trying to educate the people who have a boatload more experience than you.

I didn't try to educate someone. The whole post is a question, at the very beginning i was writing: "I may be mistaken"

pruned mode with TOR

How long it will take to sync if the node was offline for one month?

[0x000369]

There are often videos online claiming that using your own personal node is more secure and confidential than using a regular wallet. I believe this is not the case, but I may be mistaken.

@yowbow yeah you are mistaken

running your own node means you dont leak your addresses to third party nodes via bloom filters or light client queries thats a big privacy win

with a wallet like electrum you query servers they see what youre interested in cluster your addresses easy

node verifies everything yourself no trust in others for chain data

security wise yeah its more work to set up but if you cant handle that stick to hodling in a hardware wallet

tor helps hide ip but even without if youre not reusing addresses and mixing coins youre better off

those videos are right op dont fud your own node setup

as for always online nah shut it down when not using prune it if space is issue

newbies always overthink this lol

[Cookdata]

Do yourself a favor, mister 6-post newbie.  Come here with an open mind, willing to learn.  Don't start out trying to educate the people who have a boatload more experience than you.

I didn't try to educate someone. The whole post is a question, at the very beginning i was writing: "I may be mistaken"

Your post doesn't look like who was asking a question, you clearly make a comparison and tried to explain. Let's say you didn't ask the question directly, there is no single question mark??? on any of your paragraphs.

You understand a little, fair point but at the same time you are spreading wrong information. Improve instead of defending.

Look at here, https://learnmeabitcoin.com/technical/networking/node

You will learn more from there and some of the link above my post.

pruned mode with TOR

How long it will take to sync if the node was offline for one month?

Transactions blocks of 1 month node might just be some GB but syncing depend on how fast your internet bandwidth is and your internet speed. You should be able to sync a month blocks in a day with good internet.

[DireWolfM14]

"I may be mistaken"

Indeed you are.

[yowbow]

there is no single question mark

there is one in the name of the topic 

Transactions blocks of 1 month node might just be some GB but syncing depend on how fast your internet bandwidth is and your internet speed. You should be able to sync a month blocks in a day with good internet.

Does it make sense to run a node while syncing with Tor? Or is it better to run clearnet to speed up the sync process, and then switch to Tor and make transactions?

[Cookdata]

there is no single question mark

there is one in the name of the topic 

My bad eyes!

Transactions blocks of 1 month node might just be some GB but syncing depend on how fast your internet bandwidth is and your internet speed. You should be able to sync a month blocks in a day with good internet.

Does it make sense to run a node while syncing with Tor? Or is it better to run clearnet to speed up the sync process, and then switch to Tor and make transactions?

Sync over tor makes sense but might be slower than when you sync over clearnet. Since you can start new connections when you turn on tor, there is no need to sync with tor for fast sync. When you are fully sync on clearnet, you can make a new connection with tor and start your transactions.

[BitMaxz]

How long it will take to sync if the node was offline for one month?

I think you don't get what I said. You need a separate device and wallet. The other device must be offline, and the other one is online, where your node is set up.
If you set it to prune, it depends how much data size you set; the syncing process might take only a few days on a smaller size, but still it depends on your device specs.

I hope that you do some research first here on the forum, and please don't use the AI to gather information because it will only lead you to the wrong information.

[yowbow]

You understand a little, fair point but at the same time you are spreading wrong information. Improve instead of defending.

I made some changes to the topic so that no one would doubt that these are just my reasoning and questions, but not statements.

security wise yeah its more work to set up but if you cant handle that stick to hodling in a hardware wallet

At what amount someone owns (e.g., 0.1 BTC, 1 BTC, 10 BTC) does it make sense to use a personal node?

[Mia Chloe]

~snip

Running your own node is another way to exercise privacy. There are a lot of information your nodes can see ( by your nodes I mean nodes that you are connected to. ) and the fact is some privacy enthusiasts find it less private since your IP, transaction history and public keys can all bee seen.

For additional security you can add making use of tor just to further make your IP private. But for personal nodes you only get an updated balance up to where you last synced.

[satscraper]

You understand a little, fair point but at the same time you are spreading wrong information. Improve instead of defending.

I made some changes to the topic so that no one would doubt that these are just my reasoning and questions, but not statements.

What you’re describing as “wallets” are actually SPV clients. Wallet is too broad a term.

Nodes and SPV clients perform different functions ^{so comparing them is like comparing chalk and cheese}.

Some applications, like Bitcoin Core, integrate both components into the single package.

Some ideas, such as “a personal node needs to be constantly online,” are simply incorrect. You’re free to start your node whenever your SPV client needs it. The trade‑off with this approach is that you’ll have to wait for the node to fully sync. But this is not a problem  if the node has been turned off for a couple of days, ^{or even for weeks or months}.”