Role of a validator in blockchain
Validators are responsible for adding new blocks and verifying transactions in proposed blocks, thus playing a vital role in the functioning of the blockchain.
A validator is crucial in validating transactions in blockchain consensus mechanisms like proof-of-stake (PoS) and proof-of-authority (PoA). They check whether new transactions align with the network’s rules and ensure that the sender has adequate funds to complete the transaction.
Validators are also responsible for ensuring the security of the blockchain by monitoring the network for any nefarious activities, such as double-spending. The term “double-spending” refers to spending the same currency units twice. Blockchains prevent it by connecting the open ledger with cryptographic algorithms.
Validators get paid in the native cryptocurrency of the underlying blockchains. For instance, validators on the Solana blockchain get paid in SOL (SOL).
How proof-of-stake (PoS) validators function
PoS validators check if the transactions in the proposed block are valid, add the block to the blockchain, and maintain records of the ledger. For their contribution, they earn rewards in native cryptocurrency.
In PoS blockchains, validators have three major roles: validator client, node operator and stake amount. A validator client is a software application that holds and uses private keys to verify the state of the blockchain. A node operator is an individual or entity that runs and manages validator client software and hardware. The stake amount refers to the cryptocurrency deposited as collateral by an individual or entity to become a validator.
A single validator from the pool of validators is randomly chosen to propose a block. The proposer prepares the block and broadcasts the proposal to the entire network. The community of validators approves the transactions proposed in the block. It is important to note that only verified transactions achieve finality.
On the Ethereum blockchain, the total number of validators is segregated into various subsets to process several blocks simultaneously to accelerate the speed of validating of transactions. The function of the validators agreeing on the state of the blockchain is termed consensus.
There are delegated proof-of-stake (DPoS) blockchains as well, where network users vote to elect delegates to validate the next block. Compared to PoS, DPoS brings in better-streamlined governance and faster consensus, as the number of validators is reduced without compromising decentralization. The delegates distribute the rewards earned among the users who selected them.
How proof-of-authority (PoA) validators function
In PoA blockchains, a group of validators chosen on the basis of their identity approves the transactions and produces the new block.
A PoA consensus mechanism consists of a small band of pre-selected validators who are entrusted with generating new blocks and maintaining the veracity of the network. It serves well in private or enterprise blockchains where trusted individuals or entities are chosen as validators and decentralization is low on priority.
To get into a PoA network as a validator, one usually needs to have a formal identification on the blockchain, an association with the host organization and no criminal record. Post induction, they are entrusted with validating transactions and adding blocks to the blockchain.
On PoS networks, validators run specialized software to manage transactions and forge blocks. Validators are selected, often based on their stake, to propose blocks. In some systems, one validator is chosen as the “leader node” for each block and is tasked with proposing it to the network.
This leader is then verified by other validators through consensus, ensuring the block’s validity before adding it to the blockchain. The criteria and process for selecting this leader node can vary significantly across different PoS implementations.
If a validating node approves a malicious or fraudulent transaction, it could be penalized in the form of expulsion from the list of validating nodes for a certain duration or a complete ban.
What is the difference between miners and validators?
In PoW blockchains like Bitcoin, miners validate and add transactions to the blockchain through mining, while other nodes act as validators by verifying transactions and blocks without contributing to the mining process, whereas validators in stake-based systems approve transactions and create blocks based on their stake without intensive computation.
Both miners and validators ensure the accuracy of transactions and add blocks to the blockchain. However, their responsibilities and ways of functioning differ depending on the type of blockchain they are working on.
In PoW systems, miners solve complex puzzles to add blocks to the blockchain. In the process, they validate transactions by including them in the blocks they mine. Solving these puzzles requires immense computational power while competing with other miners. The miner who resolves the problem first gets to add their block to the blockchain and is rewarded with native cryptocurrency or transaction fees.
Validators are entrusted with validating transactions in PoS and PoA blockchains. In PoS blockchains like Ethereum, they are selected based on the number of coins they have staked as collateral. On the other hand, on PoA blockchains, they are chosen based on their reputation and identity. The system rewards validators for certifying transactions and honest behavior.
What is the process of running a validator node?
To begin operating as a validator node is a six-point process. It includes selecting a blockchain, setting up hardware, installing software, joining as a validator, monitoring the node and managing rewards.
Operating a validator node efficiently requires a slew of steps:
Select a blockchain
The first step is to select a blockchain, preferably one with a high transaction volume and a need for validators.
Set up hardware
To run the node, validators will need a computer with adequate RAM, storage and processing power. Every blockchain has its own specifications regarding hardware requirements.
Install the software
The validator needs to install and configure the software program for their chosen blockchain. All blockchains use different validation software. Keep software up-to-date and use strong passwords to protect validator nodes from hacking attempts.
Join as a validator
PoS blockchains require one to stake the amount of cryptocurrency required and join the network as a validator. On the other hand, on PoA blockchains, one would need proof of identity to join. Some blockchains require validators to join a validator pool.
Monitor the node
Validators must constantly monitor their node to ensure its smooth functioning and fix any issues that might arise.
Manage rewards
Blockchains pay validators in the form of cryptocurrency. Validators need to be well-versed in the reward structure and the process for claiming their rewards.
Emerging trends and innovations in the field of blockchain validation
The need for securer, more scalable and practical solutions is driving notable developments and breakthroughs in blockchain validation.
One trend is developing consensus methods beyond the conventional PoW and PoS models. Protocols, such as proof-of-burn (PoB), PoA and proof-of-space (PoSpace), provide distinctive validation methods focusing on user involvement, security and energy efficiency.
Another innovation is using zero-knowledge proofs, which improve security and privacy by enabling validators to confirm transactions without disclosing underlying data. Furthermore, interoperability solutions are being developed to facilitate communication and value transfer between dissimilar blockchain platforms to promote a more integrated and effective blockchain ecosystem.
These advances have ushered in a new era of blockchain technology, making blockchains more widely applicable, accessible and sustainable across many industries.
