Do Blockchains Run on Servers? 6 Things To Know

Given the recent mainstream popularity of cryptocurrencies, you’ve probably heard about the blockchain whether you wanted to or not. However, this perplexing term is often heard and rarely understood, and even those that are familiar with its operation still find themselves with questions. Servers are one of many types of computing hardware, but do they have anything to do with the blockchain?

Blockchains don’t run on servers. Instead, they run on individual computers spread out across the world. In some cases, these may be connected to servers. Blockchains are decentralized to allow for better privacy and security from hackers.

To better understand the blockchain and how it operates, there are a handful of essential things to know. In the rest of the article, we’ll go over some of the basic elements of the blockchain so that you come out with a better understanding. 


6 Things To Know About the Blockchain

There’s a lot to learn about the blockchain and its operations. For example, most blockchains run with open source software, as this allows anyone to access the code for mining. And if they run on servers, it could potentially make the blockchain worthless.

Let’s talk more about what you should know about blockchains.

1. The Blockchain Is Decentralized and Runs on Nodes

Decentralization has always been one of the greatest appeals of cryptocurrency, but for something to be decentralized, it needs to be spread out. 

Rather than run on a single server or small group of servers, a blockchain runs on hundreds, if not thousands, of individual computers, called “nodes,” that are spread out across the entire world. These are often just regular computers run by individuals with sufficient computer memory and internet speeds. 

All of these computers have access to the same information and the same replica of the blockchain, meaning no computer is more important than the other. 

There’s no central server or computer system that controls or oversees the blockchain’s operation. Instead, every node shares the responsibility, and the greater the number of nodes, the greater the decentralization. 

2. Running the Blockchain Doesn’t Require a Ton of Computing Power

You may have heard about the possible environmental impact of mining Bitcoin, but running the blockchain requires far less power consumption

To run a full node, there are some basic storage and internet speed requirements that need to be met. Sometimes these requirements might cost you slightly more than you’d normally spend for your typical computer usage, and other times, people are able to run nodes for a lot less. 

The point is that a typical server, like the one you’d see running company computers, is often far more computing power than you’d need to download and run the blockchain. 

Some node runners may have sophisticated setups, especially if they’re mining bitcoin at the same time, which many of them do. However, anybody that meets the basic internet and storage requirements could theoretically run a node for the blockchain. 

3. Most Blockchains Are Open-Source Software

Typically, blockchains come from software that you download onto your device, meaning they can technically run on any device that can handle the software. This also means that a server most likely wouldn’t run the blockchain itself. 

However, there might be nodes running the blockchain that are connected to a server. 

Blockchain software is also open-source, meaning anyone is able to analyze its code. This creates a more transparent environment, but it also ensures that people are able to analyze the software for security reasons. 

Open-source software allows anybody to catch suspicious activity.

4. Servers Would Potentially Hurt the Blockchain

Depending on the setup, connecting the blockchain to servers could potentially hurt certain aspects of the network. Additionally, a typical server setup is more centralized than a peer-to-peer setup, which is what the blockchain operates on. 

There are typically multiple devices that are connected to and dependent upon a server, which wouldn’t be ideal for a public blockchain. If there were an issue with the server, all devices that relied upon that server might not function properly. 

One of the purposes of having a vast peer-to-peer network of nodes is that the system won’t be hurt if one of the nodes fails. 

5. There Are Four Types of Blockchain

There are actually four different types of blockchains. Some blockchains may be more centralized than others and, as a result, may utilize larger computer equipment to carry out their operations.

Public Blockchains

The public blockchains are the blockchains that run decentralized cryptocurrencies like Bitcoin. 

Essentially, anybody is allowed to join a public blockchain, and there’s no central power, meaning everybody has equal access. There’s theoretically no limit to the number of nodes that are allowed on a public blockchain, and this is the only setup that promotes full decentralization. 

In a public blockchain, everybody usually has a say in governance, and all transactions must be approved by each node to be validated. 

Private Blockchains

On the other hand, there are also private blockchains. A single entity not only controls the private blockchain but also decides who is able to join and how much access they’re able to have. 

By having a primary decision-maker, this blockchain structure removes most, if not all, of the decentralization of the network. 

Public blockchains are most common for public applications, but private blockchains are more commonly found in business operations. The primary controller of the private blockchain is also able to freely edit entries on the blockchain. 

Hybrid Blockchains

As the name suggests, hybrid blockchains combine aspects of both private and public blockchains. Typically, in a hybrid blockchain, there’ll be a central authority. However, there’s still a network of nodes that are relied upon for certain decisions and transaction validations. 

In a business sense, hybrid blockchains might reduce transaction costs due to there being fewer nodes. 

The hybrid blockchain has a privacy level that’s more in line with the private blockchain. Since there’s a central authority, hybrid systems also have the ability to customize various aspects of the network in ways that a public blockchain wouldn’t be able to. 

Still, if the controlling entity chooses, they’re able to create a high level of decentralization that’s closer to that of a public blockchain. 

Consortium Blockchains

Consortium blockchains are run by a group of organizations. Since there’s not a single controlling body, consortium blockchains are a little more decentralized than a private blockchain. 

Typically, the group of controllers collaborates to decide how the blockchain will be managed and who’ll have access, among other things. However, these types of systems are sometimes difficult to assemble, given how many people need to collaborate to make it happen. 

Since consortium blockchains are often found in government and enterprise applications, the computer systems might be more sophisticated than those running a public blockchain. 

6. You Can Download the Blockchain Right Now

In theory, you could download the Bitcoin Core software and connect to the Bitcoin network right now, provided that you have the internet and storage requirements to do so. 

You’d also want to keep in mind that Bitcoin and other cryptocurrencies are legally prohibited in some regions. There are also some other minor requirements and considerations, but as long as you do your research, running a node on your own isn’t extremely difficult. 

Running your own node benefits the health of the network, and as a public blockchain, you would also have some degree of say in how the network is governed. Running a node is also beneficial if you own Bitcoin since you would have a local copy of the blockchain. This would increase both privacy and security for you.

Wrapping Up

Blockchains don’t run on servers because it would severely limit how well Bitcoin would work for owners of cryptocurrency. However, it depends on the type of blockchain and the objectives of the group that owns it.

For example, with a consortium or private blockchain, it’s more secure to run on a server. But with public blockchains, servers are unnecessary and potentially harmful to the blockchain.


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