How to Save Bitcoin’s Node Network from Centralization

Jameson Lopp is a software engineer at BitGo, creator of statoshi.info and founder ofbitcoinsig.com. He enjoys building web services and is intrigued by problems of scale.
In this feature, Lopp examines the causes of the diminishing number of bitcoin nodes across the network and discusses what it might take to reverse the trend.
Decentralization is, I would argue, the most important property of the bitcoin network. Without it, many of bitcoin’s other properties, such as its ability to facilitate transactions without a third party or provide a permissionless platform for innovation, would be compromised.
There are many facets that contribute to bitcoin’s decentralization, the most important of which is the network of nodes that comprise bitcoin’s infrastructure by holding copies of the blockchain and sharing block and transaction data across the network.
And yet, despite their importance, the number of nodes has been dwindling for years, arguably centralizing the network.
I’ve been writing about the decline in node counts for a couple years and have been monitoring my nodes with the Statoshi software I released in 2014. Because the performance of nodes and the bitcoin network in general has become a hot topic in recent scalability debates, I hope to shed some light on a few points that haven’t received much attention.
In the early days of bitcoin, the only way to participate on the network was by running a full node. Over the years, the ecosystem has flourished and now there are many wallet options for users to choose from. Most wallets today are either lightweight clients that query full nodes for data, or they are hosted by third parties and thus do not require the user to run a full node.

This post was published at Coin Desk on January 30, 2016.