Will full-powered node rewards help resolve block size disputes?

To make digital currency work, it requires more than just network miners, but also a large number of nodes to broadcast information, serve the blockchain, and provide security for the Bitcoin network. In general, encrypted digital currency requires 24/7 online full nodes, allowing machines to load the core client of the complete blockchain.

Having more nodes means better decentralization and a more secure network, so that users can always find a node to broadcast transactions. But the problem now is that the number of full nodes in the Bitcoin network has been declining, from about 10,000 last year to about 6,000 now. One of the reasons is that users do not get rewards when running nodes, but miners can get rewards when they work.

Block size dispute

The problem with the block size dispute this time is that larger blocks require more resources to run a full node, which reduces the interest of enthusiasts and independent operators, leading to greater centralization.

格里高里•麦斯威尔recently said:

“Do people think that in the future, I guess with the exception of马克•赫恩, that relying on a small number of nodes is really going to work?”

Gavin加文•安德森saying that Satoshi Nakamoto would also think this is a viable approach when talking about the trend towards centralization, and pointed out that this is what the future will look like:

“It would be safer for users to use simplified payment verification methods to check for double spending, which only needs to be maintained by blockchain giants. As the network grows to a certain point, only more and more experts will be left running mining pool services.”

Is there no other solution?

For example, Dash has a reward scheme in its core protocol to encourage people to set up full nodes. Just like miners, full node (masternode) operators receive a certain percentage of the mined block rewards. In just 19 months, the number of full nodes in the entire network has exceeded 3,000, which is half the size of the Bitcoin core network, but its market value is relatively small.

In addition, in order to keep the masternode active and continue to receive rewards, Dash's core client must be updated within 7 days, so node operators can rely on the latest network for a long time. Dash calls this system服务量证明机制.

In the future, this system can also be used to balance the needs of bandwidth, processing power and storage data. However, running a masternode can earn rewards, which allows independent operators to continue to operate, of course, this process also requires resources to run the node.

Is it really that easy to achieve?

Encouraging the establishment of master nodes does increase some risks. Malicious third parties will set up a large number of master nodes to launch Sybil attacks on the entire network, which is less costly than launching attacks on networks with proof-of-work mechanisms. (Note: Sybil Attack refers to a malicious device or node illegally appearing in multiple identities. We usually call these redundant identities of this device or node Sybil devices or nodes.)

Bitcoin developer彼得•托德recently addressed these issues:

“It’s fairly easy to Sybil-attack the IP address space compared to the hashing power required to cause false confirmations, so any attacker could very well attack the masternodes you have to connect to.”

However, to avoid this problem, Dash requires 1,000 DASH as a deposit when running a node. These DASH will be stored cold at an address controlled by the node operator. As long as they can establish a connection with the master node, they will be valid and can obtain rewards.

The DASH team explained to CoinTelegraph:

“If you’re going to have a full node reward program, you should also have a deposit to prevent people from abusing the system. The deposit is important to prevent Sybil attacks. For example, a blockchain analysis company can’t run fake nodes to spoof transactions at will.”

While this system seems to work well for DASH, it would be foolhardy to see it as the silver bullet for resolving block size disputes, but it would be equally foolish to ignore the potential usefulness of altcoins.