Validators in Blockchain: The Gatekeepers of Cryptocurrency Security

Validators and Miners: What’s the Difference?

When it comes to blockchain security, many people tend to confuse two concepts: validators and miners. Although both are responsible for ensuring transaction accuracy and adding blocks to the blockchain, their working methods and responsibilities are quite different.

In PoW (Proof of Work) systems like Bitcoin, miners add blocks by solving complex mathematical puzzles. This process requires enormous computational power and competition among miners. The first miner to solve the puzzle can add their block to the blockchain and receive cryptocurrency rewards or transaction fees. Other nodes act as validators, verifying transactions and blocks without participating in the mining process.

In contrast, in PoS (Proof of Stake) and PoA (Authority Proof) systems based on stake, validators operate by approving transactions and creating blocks without intensive calculations. Their selection and reward mechanisms are entirely different, making these systems more energy-efficient than traditional proof-of-work.

What is a Blockchain Validator and Its Core Responsibilities

The concept of blockchain validators has become an indispensable part of the cryptocurrency ecosystem, playing a key role in adding new blocks and checking transaction validity. Validators are crucial for the proper functioning of the blockchain.

The main tasks of validators are:

• Verify transaction validity: Ensure new transactions comply with network rules, check if the sender has sufficient funds to complete the transfer
• Maintain network security: Monitor malicious activities such as double-spending (spending the same funds twice). Blockchain prevents this by combining a public ledger with cryptographic algorithms
• Earn rewards: Validators receive native cryptocurrency of the blockchain as incentives. For example, validators on the Solana blockchain earn SOL tokens as rewards

How Validators Work in Proof of Stake (PoS) Systems

In PoS blockchains, validators check whether transactions in proposed blocks are genuine and valid, add the blocks to the blockchain, and record them in the ledger. As contributors, they earn rewards in the form of native cryptocurrencies.

In PoS blockchains, validators play three different roles:

1. Validator Client: A software application that stores and uses private keys to verify the blockchain state
2. Node Operator: An individual or organization that runs and manages validator client software and hardware
3. Staked Amount: The cryptocurrency individuals or organizations put up as collateral to become validators

A validator is randomly selected from a pool of validators to propose a block. The proposer prepares the block and broadcasts the proposal across the network. The validator community then approves the transactions in the block. Note that only validated transactions can reach final confirmation.

Ethereum and other PoS blockchains divide all validators into different subsets to process multiple blocks simultaneously and speed up transaction validation. The function used to coordinate blockchain state is called consensus.

There is also a variant called Delegated Proof of Stake (DPoS), where network users vote to elect representatives to validate the next block. Compared to PoS, DPoS offers more optimized governance and faster consensus because the number of validators is reduced, without sacrificing decentralization. The elected representatives earn rewards, which are distributed to the users who voted for them.

The Role of Validators in Proof of Authority (PoA)

In PoA blockchains, a group of validators is selected based on their identity, and they approve transactions and create new blocks. The PoA consensus mechanism consists of a small group of pre-selected validators responsible for generating new blocks and maintaining network trustworthiness.

This mechanism works well in private or enterprise-level blockchains, where trusted individuals or organizations are chosen as validators, and decentralization is not the primary concern.

To join a PoA network as a validator, one typically needs:

• To have formal identity recognition within the blockchain
• To be associated with an accepting organization
• To have no criminal record

Once included, validators are tasked with verifying transactions and adding blocks to the blockchain.

How Validators Are Selected in PoS Networks

In PoS systems, validators use specialized software to manage transactions and create blocks. They are usually chosen based on the amount of tokens they have staked. In some systems, a validator is selected as the “leader node” for each block, responsible for proposing the block to the network. This leader is then validated by other validators through consensus to ensure the block’s validity before it is added to the blockchain.

The criteria and process for selecting this leader node vary significantly across different PoS implementations. If a validator approves malicious or fraudulent transactions, it may be penalized, including being removed from the validator list for a certain period or being completely banned.

Six Steps to Launch a Blockchain Validator Node

Becoming a validator node involves a structured process, including choosing a blockchain, configuring hardware, installing software, joining as a validator, monitoring the node, and managing rewards.

The specific steps include:

1. Choose a Blockchain
The first step is selecting a blockchain, preferably one with high transaction volume that requires validators.

2. Hardware Configuration
Running a validator node requires a computer with sufficient RAM, storage, and computing power. Each blockchain has its own specific hardware requirements.

3. Software Installation
Validators need to install and configure the appropriate software for the chosen blockchain. Different blockchains use different software for validation. Keep the software up to date and protect the validator node with strong passwords to prevent hacking.

4. Join as a Validator
PoS blockchains require users to stake the necessary amount of cryptocurrency and join the network as validators. In PoA blockchains, identity verification is required upon joining. Some blockchains may also require validators to join a validator pool.

5. Node Monitoring
Validators must continuously monitor their nodes to ensure proper operation and resolve any issues that arise.

6. Reward Management
Blockchains pay validators rewards in cryptocurrency. Validators need to understand the reward structure and the process of claiming rewards.

Latest Developments in Blockchain Validation Technology

The demand for safer, more scalable, and more practical solutions is driving significant progress and breakthroughs in blockchain validation.

Currently, the industry is exploring new consensus methods beyond traditional PoW and PoS models. Protocols such as Proof of Burn (PoB), Proof of Authority (PoA), and Proof of Space (PoSpace) offer unique validation approaches focused on user participation, security, and energy efficiency.

Another innovation is the application of zero-knowledge proofs, which enhance security and privacy by allowing validators to confirm transactions without revealing underlying data. Additionally, cross-chain interoperability solutions are under development, facilitating communication and value transfer between different blockchain platforms, fostering a more integrated and efficient blockchain ecosystem.

These advances are ushering in a new era of blockchain technology, making blockchain more widely applicable, accessible, and sustainable across many industries.