The ethereum network has nearly 25,000 reachable nodes, spread across the globe, less than two years after its launch, while bitcoin currently has only around 7,000 nodes that verify the network.
The bitcoin community has been engaging in a long standing debate on scalability with node numbers being the primary point of contention regarding the available options to increase capacity.
Small blockers argue that an increase of on-chain capacity adds resource requirements on nodes, thus increases costs, which leads to a decreased number of individuals who are willing to run a node.
They then extrapolate to sometime in the next century to say that as on-chain transactions are kept forever, nodes will eventually have to be in massive data centers, thus decreasing their numbers considerably to perhaps 10 or 20. On-chain transactions, therefore, should be kept limited, argue small blockers.
Big blockers say that technology grows exponentially with resource requirements to run a node being negligible, therefore on-chain capacity should operate above demand so that it is useful to the most amount of people.
They further argue that as on-chain demand increases, so do the number of individuals or businesses who wish to or have to run a node, thus increasing the number of nodes.
The small blocker’s proposition, they say, will either keep node numbers static or will cause them to decrease gradually as network utility is lowered due to lack of capacity.
As for the very long term, sharding is a solution which can lower resource requirements for nodes, they say, allowing them to always be easily affordable for businesses, researchers, long term holders and even hobbyists.
It might be a stretch to use eth’s nodes numbers and bitcoin’s as any evidence in that on-going debate, not least because they may have their own specific reasons, but since the debate doesn’t have many data points, the node behavior of the two biggest networks might be an indicator.
That is because ethereum follows the big blockers approach. They plan to scale on-chain to unlimited transactions through sharding, while also using layer two networks for those who make recurring payments.
Bitcoin, on the other hand, has been operating under full blocks for now more than a year. During that period, bitcoin’s node numbers have remained relatively static, despite the network increasing in price by more than 10x.
That’s probably because bitcoin has not really found any new business adoption during that time-frame, with businesses in fact leaving. The level of individuals or businesses incentivized to run a node in the whole community, therefore, has remained static.
For eth, it has increased considerably. There used to be around 8,000 last year, now increased to nearly 25,000, up around 81% just last month. Quite an astonishing increase and indicative of a much higher level of network utilization.
That is probably because ethereum has seen considerable adoption by businesses, being utilized in projects from ICOs and token sales, to enterprise levels, to household brands and in start-up projects.
All of them are highly incentivized to run a node to the point of finding it necessary, because they need to be certain of what exactly is happening and they require the highest level of security.
Individuals, on the other hand, don’t really need to bother with a full node as a light version satisfies most tasks, but developers, researchers, hobbyists, in multinationals labs, university computer departments, start-ups offices, all need the full software to operate in the most secure and trustless manner.
That they can do so is, of course, important, because they need to verify the network, which is why node counts do matter. The question was always how best to increase them and, although the above data isn’t quite perfect, it does appear that the best way to increase node numbers is to increase utility.
That is because a business can easily afford to set a laptop aside and have it do nothing else, but run a node. Individuals, on the other hand, will probably want to use the laptop for many other things and might not be keen to see it freeze due to the node’s CPU usage.
They, of course, still can if they wish, but in a way it is a privilege to transact so completely securely, therefore the cost of $100, or even $1,000, for a node, appears insignificant.
Especially since ethereum will very soon start paying those who run a node after the Proof of Stake upgrade. Then, just by depositing some eth in a savings account manner, everyone will be able to join the protocol, securing the network, while getting paid for it.
Eth’s node numbers, therefore, will probably increase even further, despite the network already having the highest number of nodes of any public blockchain, making it the most decentralized network.