Explaining Blockchain Technologies, page-20

A node is an individual component which take in input and performs a function on it and gives out an output.

So a kettle is a node - it take electricity and water and heats it and outputs boiled water. The kettle also has parameters which tell it when its job is done and to switch off.

In the context of Ethereum a node is simply a computer that participates in the Ethereum network.

Ethereum is structured as a peer-to-peer network, such that the participants (the nodes) are not given any extra special privileges. The idea is to create an egalitarian network. The nodes are not given any special privileges, however, their functions and degree of participation may differ. There is no centralized server/entity, nor is there any hierarchy. It is a flat topology.

All decentralized cryptocurrencies are structured like that is because of a simple reason, to stay true to their philosophy. The idea is to have a currency system, where everyone is treated as an equal and there is no governing body, which can determine the value of the currency based on a whim. This is true for both bitcoin and Ethereum.

If there is no central system, how would everyone in the system get to know that a certain transaction has happened? The network follows the "gossip" protocol. Think of how gossip spreads. Suppose I sent you 3 ETH. The nodes nearest to me and you will get to know of this, and then they will tell the nodes closest to them, and then they will tell their neighbors, and this will keep on spreading out until everyone knows. Nodes are basically your nosy, annoying neighbours!

Nodes can participate in three ways:
Keeping a full-copy of the blockchain a "Full Node"
Keeping a shallow-copy of the blockchain a "Light Client"
Verifying the transactions a "Mining Node"

When I first set up my Dev stack I didn't know about Light Clients so I ended up downloading the full-copy - it took about 4 days. There was about 3.5 million blocks then - it think it approaching 4.9 now.

Light Clients get high-security assurances about certain states of Ethereum and also the power to verify the execution of a transaction but thats all.

Full nodes form the backbone of the Ethereum system and keep the entire network honest. Some of the consensus rules that full nodes enforce are making sure that:
The correct block reward is given out for each block mined
Transactions have the correct signatures
Transactions and blocks are in the correct data format
No double spending is occurring in any of the blocks

All miners are full nodes, but not all full nodes are miners. Miners need to be running full nodes to access the blockchain. Anyone who runs a full node need not mine for blocks. I don't mine them for example.

Ethereum has seen widespread adoption because of the popularity of its ICOs. As a result of this, the number of nodes on the Ethereum network has increased exponentially. In fact, it is the cryptocurrency with the most nodes and hence most decentralized.