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Surely you have already heard the famous adage that reminds you of the importance of self-custody of your bitcoins:” Not Your Keys, Not Your Bitcoin ”. In French, this can be translated as:” Not your keys, not your bitcoins ”. In reality, possession of the keys is not enough to completely do without the need for trust on Bitcoin. To do this, the user must also rotate and use their own node.
Unlike mining, running a Bitcoin node does not provide any pecuniary benefits. However, the use of your own node brings significant benefits in the use of Bitcoin. Let's take a look at 6 reasons that should encourage you to set up your own Bitcoin node.
Not Your Node, Not Your Rules/Not your node, not your rules.
When you make a transaction with your Bitcoin wallet, it must be signed and then broadcast to a network node. Each node verifies your transaction and forwards it to its peers, so it can reach a miner who will include it in a valid block.
If you're not running your own Bitcoin node, you'll need to stream your signed transactions to a third-party node. This will be able to make a link between your various transactions, which is a problem for your privacy.
If on top of that, you don't use Tor (The Onion Router) to broadcast your transactions, the operator of the node you used may eventually be able to find your IP address and locate you.
By streaming your transactions through your own Bitcoin node, you eliminate these risks of tracking and loss of privacy. No one will be able to make these connections anymore, except yourself.
As we saw in the previous part, the distribution of your Bitcoin transactions must necessarily go through a node. If you're using a node that's not yours, there's nothing stopping the entity that owns it from blocking your transactions and not distributing them to their peers.
If you run your own Bitcoin node, then your transactions are broadcast to the network by hardware that belongs to you. No one can individually censor your transactions anymore, and prevent you from using Bitcoin.
Bitcoin is incensurable only for people who use their own node.
Since nodes store past transaction data, Bitcoin software must inevitably interact with one of them to know the balance of a wallet.
Moreover, the only method to guarantee yourself that no cheating takes place, and that the maximum emission of 21 million bitcoins is respected, is to set up your own node.
By running your node, you are storing your own version of the Bitcoin blockchain with the rules you set. You can therefore check the various information related to Bitcoin via your node, without going through the node of a trusted third party.
For example, if you use the Ledger Live software without connecting your node to it, the client will automatically connect to the Ledger enterprise node. Therefore, this node is in a position to lie about the nature or quantity of bitcoins you have with your keys. You are then obliged to trust this third party so as not to lie to you about the information they transmit to you.
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The Bitcoin protocol is an open system. Anyone is in a position to propose changes to the software rules. If you want to be an actor in these changes, and not have an update imposed on you that you would disapprove of, you must have your own node. By choosing which rules are applied or refused by your node, you have a certain economic weight in the Bitcoin governance system.
Surely the most recent example is the debate around Full-RBF (Replace By Fee). Some developers have recently urged an update of the nodes so that Bitcoin Core is in the “Full-RBF” policy by default.
RBF is a node policy that aims to allow the replacement of a Bitcoin transaction pending confirmation, in the mempool, by another transaction that spends the same entries, but has higher fees.
Initially, RBF had to be reported by the issuer of the transaction in order to be able to replace it. With Full-RBF, a node accepts its replacement, even if RBF has not been reported. This activation obviously raises a number of technical questions.
If you have your own Bitcoin node, you are free to choose a full-RBF policy if you think it's good for the Bitcoin system, or another policy if you think the other way around.
This choice is true for Full-RBF, but it is also true for any other node updates or policies. You therefore have a weight in the Bitcoin governance system by choosing which code you run on your node.
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There are a lot of different aspects to the decentralization of the Bitcoin system. Nodes represent one of these factors. By running your own node, you're creating a new copy of the Bitcoin blockchain and setting up a new computer that runs the protocol.
The more Bitcoin nodes spread around the world, the more difficult it is to shut down the system. As a user, you surely want Bitcoin to remain distributed, robust, and secure. By running your own knot, you contribute to these goals at your level.
Another benefit that you could get from operating your own Bitcoin node is the enrichment of your technical skills related to the protocol.
Beyond theory, it is through practice that we best understand the mechanisms involved. If you decide to run your own node, you're bound to come across information you didn't know, or encounter technical problems that require you to study and understand some of the workings of Bitcoin.
➤ Discover what a Bitcoin node is.
Even though running a Bitcoin node doesn't give you any pecuniary benefits, it allows you to interact with the Bitcoin network in a more reliable, independent, private, and secure manner.
To summarize, here are the six reasons that may lead you to want to set up and use your own Bitcoin node: