Running A Bitcoin Node
By Des Femmes team member Rachel H
You don't have to be a tech bro to set up a Bitcoin node.
What Is a Bitcoin Node?
A node is a computer that stores and validates blocks (information) on the blockchain. Whenever you use the Bitcoin blockchain (e.g. sending, receiving, or checking Bitcoin balances), you are interacting with a node (even if it is not yours) to transmit information about the current state and history of the blockchain.
A node verifies information about the transactions and blocks within the blockchain.
There are two types of nodes: a full node and a lightweight/Simple Payment Verification (SPV) client.
A full node has its own copy of the entire Bitcoin blockchain. It downloads and validates every block according to the consensus rules of the Bitcoin network.
Lightweight/SPV clients do not store an entire copy of the blockchain. However, they still are able to verify if transactions are included in a block by requesting information from other full nodes on the network.
What are the benefits of running a Bitcoin Node?
By running a full Bitcoin node, you can have a deeper understanding of how the Bitcoin network works, contribute to the network’s security, and, if you use the Lightning Network with your own node, you can even earn money through fees by routing transactions via Lightning!
Most importantly, you are also able to access the network and your funds in a trustless, non-custodial manner, which allows you to have full control over your Bitcoin.
Before getting started, it is recommended that you read the Bitcoin whitepaper (https://Bitcoin.org/Bitcoin.pdf) and have some understanding of what Bitcoin is and how it works. Bitcoin.org has great resources (https://Bitcoin.org/en/resources) for all interested in understanding Bitcoin!
- Umbrel Operating System (https://getumbrel.com/#start)
- Balena Etcher Software (https://www.balena.io/etcher/)
- Raspberry Pi 4
- 1 TB Solid State Drive
- SSD Enclosure
- 16 GB MicroSD Card
- MicroSD Card Reader/Adapter (if your computer doesn’t have a port)
- Power Supply for Raspberry Pi
- Ethernet Cable
- Raspberry Pi Case
- Reliable Internet Connection
Setting up a Node:
Open your browser and go to https://getumbrel.com/
Scroll down and you will be presented with the option to install Umbrel on a Raspberry Pi 4 or Linux. You will need to choose the “Install Umbrel on a Raspberry Pi 4” option.
Click on “How To Install.”
From here, the Umbrel website will guide you through a step-by-step process of how to install the Umbrel OS onto your computer. Follow the steps and ensure that each step has been completed successfully.
First, download the Umbrel OS onto your computer.
After downloading the Umbrel OS, take note of where the zip file was downloaded but DO NOT unzip the file. After successfully downloading the zip file, click the arrow button on the website to proceed to the next step.
Next, download and install Balena Etcher.
Click the “Download” button to be redirected to the balenaEtcher site.
On the balenaEtcher website, choose your computer’s OS either from the dropdown menu or from the list as you scroll down the page. Then download the balenaEtcher software.
Take note of where the software is being downloaded on your computer. Once the software has downloaded, you can close the balenaEtcher website and click the next arrow button on the Umbrel website to proceed through the guide.
Plug the microSD card into your computer. Use the microSD card reader adapter if your computer does not have a microSD card port.
Open the balenaEtcher software. It will be on your computer as an executable file (.exe) and you will not have to go through an installation process to open the software.
Once you open the software, click on “Flash from file” and navigate to where the Umbrel OS zip file was downloaded on your computer. Select the Umbrel OS zip file and click open.
Once you have opened the zip file, the balendaEtcher window should display that the file has been chosen.
Confirm the location of where the Umbrel OS will be flashed by clicking “Change” under the icon of the hard drive (the second icon).
Once you have chosen the microSD card, click the “Select” button.
The name of your SD card might be different from this one. If you are unsure of the location of your SD card, open the file explorer and look under the “Devices and Drives” to locate the drive where your SD card is located (C:, D:, E:, etc.).
Once you have chosen the Umbrel file and the correct location of the SD card, click the “Flash” button. The balenaEtcher software will begin the flash process. You may get a pop-up prompt asking if the software or command line can modify your computer. If this pop-up appears, click “Yes” so that the software can execute.
Once the flash is complete, you will get a message from the balenaEtcher software saying that the flash was successful.
You may get a message from Windows asking if you want to format the disk, click “No” and continue to the next step.
You will need to remove the microSD card from your computer and put it into the Raspberry Pi. To do this, navigate to the bottom of the taskbar and right click the SD card icon to safely remove the hardware before manually removing the hardware from the computer.
Insert the microSD card into the Raspberry Pi. The card will be inserted into a small slot on the backside of the Pi on the opposite side of the USB ports.
Put the SSD into an SSD enclosure and connect it to one of the blue colored ports on the Raspberry Pi.
Next, connect your Ethernet cable to your Raspberry Pi.
Then connect the other end of the Ethernet cable to your internet router. After connecting the Ethernet cable, connect the power supply to the Raspberry Pi to turn it on.
When everything has been connected to the Raspberry Pi, it should look similar to this:
When powered on, lights will appear on the Pi. You are now finished setting up the Pi hardware!
Go back to your computer and navigate to http://umbrel.local/start. If the page doesn’t load, wait before trying again.
Click Start. Follow the Umbrel Prompts to set a name and password. The default Umbrel password is “moneyprintergobrrr” exactly as it is typed here.
After the username and password, this page will appear:
Make sure your secret words are somewhere safe and that you are not in public when noting your secret words. It’s very important to write these words down on paper. Do not store them on your computer or cloud services.
These secret words are similar to a master password. If you lose your login information or need to set up your account on a different device, you can use these words to recover your account.
Anyone who has access to these words can access your funds and possibly drain them all!
Make sure to keep these secret words safe!
Umbrel will then give you a .onion link (a random string with .onion) to access your Umbrel from anywhere when using the Tor browser. Copy and save this somewhere safe.
Umbrel will then show this screen:
On this screen, click the “Next” button.
Congratulations! 🎉 You have completed the setup and your Umbrel will now begin syncing the Bitcoin blockchain!
As the blockchain syncs, you can explore the dashboard, connect an existing Bitcoin wallet, and check out other apps that are available for your Raspberry Pi.
Is a Bitcoin node the same thing as a Lightning Network node?
Not exactly. A Bitcoin node can run without Lighting, because Lightning is an optional scaling solution that goes on top. You can’t run the second layer network, Lightning, without a Bitcoin node as the foundation. Both nodes can run on Umbrel. Note that merely running a Bitcoin node does not earn the operator any fees for routing transactions. Only a Lightning node can charge routing fees. If you’re interested in learning more about how it works and earning a bit of income by actively participating in transactions, read our article “How to Use Bitcoin for Witchy Experiments.”
Is running a node mining Bitcoin?
Running a node is not mining. You do not earn Bitcoin by running a full Bitcoin node as a way of validating blocks. However, it is possible to earn small amounts of money if you validate transactions on the Lightning Network that are routed through your node by charging a percentage of the funds routed as a transaction fee.
Read more here: https://Bitcoin.stackexchange.com/questions/75624/what-s-the-difference-between-a-validation-by-nodes-and-a-verification-by-miners
How much can I earn running a node?
While you won’t earn anything by running a standard Bitcoin node, you can use Umbrel to run a Lightning Network node, which functions as a rapid, low cost payment network that is built upon the Bitcoin network. The amount you can earn by routing transactions through the Lightning Network varies based on how much time, energy, and money that you invest into running a node. Some people only earn a few cents per day while others earn more, although certainly don’t expect to pay rent with this income.
Is it expensive to run a Bitcoin node? Does it consume a lot of power to run a Bitcoin node?
Running a Bitcoin node is typically inexpensive. A node can be run on a simple computer such as a Raspberry Pi and does not have a high consumption of electricity. If you wish to get into mining Bitcoin, that will require considerable electricity, but we’ll save that for a future guide! :)