Blockchain validators are new “payment processors” on decentralised networks and, as such, generate blockchain rewards.
However, defining a validator in crypto is far more complicated. Additionally, the role of validators may change depending on the consensus mechanism used by each blockchain.
In this article, we will be discussing what a blockchain validator is, how it works in two different blockchains and their benefits.
What is a Blockchain Validator?
A Blockchain validator is a participant on the blockchain responsible for validating transactions. If the transaction is correct, the validator adds it to the distributed ledger. This preserves the legitimacy of the blockchain and subsequent transparency features.
The easiest way to understand what role a validator plays is to go back to the blockchain definition.
A blockchain is a system that works with a distributed register of information. A network of nodes (computers) supports this registry by storing and executing the same version of the registry simultaneously.
For example, a blockchain is like a book (register) with countless authors (nodes). Each of these authors can contribute to this book. However, they must first be verified by other authors. Then other nodes or their proxies analyse the author’s data. And if it’s correct, they verify it and add it to the register in the new block.
The number of validators required varies by blockchain. Also, the verification process may vary with the consensus mechanism of each blockchain. Ultimately, only accurate data verified by the entire community can be included in the chain.
In most blockchains, users are rewarded for their role as validators. In this way, the system offers its participants an incentive to continue the ledger scaling process.
On the other hand, all blockchains penalise users who provide inaccurate data for verification. Often these participants receive temporary or even permanent bans from the system. This is a way for the ledger to protect it from malicious use.
Types of Blockchain Validators?
The job of a blockchain validator does not seem difficult. You get some data, check its accuracy and verify it or not. However, validating new blocks on a distributed ledger is easier said than done.
However, validators on Bitcoin are different from validators on Ethereum, and validators on Ethereum are different from validators on Solana.
Validators on a Proof-of-Work Blockchain
Proof-of-Work (PoW) blockchains require validators to demonstrate that they have “worked” to verify data before adding it to the chain. Because of this, validators on these ledgers are given a more enthusiastic term, miners.
Bitcoin was the first PoW blockchain and the most popular blockchain to use this consensus mechanism. Miners use supercomputers, Application Specific Integrated Circuits (ASIC), to calculate data in the form of mathematical puzzles. The first miner to successfully validate a new block of data gets a block reward. As of September 2021, the reward is worth 6.25 BTC.
Validators on a Proof-of-Stake Blockchain
On a Proof-of-Stake (PoS) blockchain, users must stake a certain amount of the Ledger native token to become a validator. Additionally, the system can randomly select reviewers and reward only those who correctly participate in the network.
Some of the most popular PoS blockchains include Ethereum, Avalanche, and Solana. These ledgers use proof-of-stake to incentivise users to lock in value on the network. In this way, they ensure its rapid progress and development.
Validators on Byzantine Fault Tolerant Blockchains
Blockchains that don’t use PoW or PoS as a consensus mechanism can still use validators. For example, Stellar is a blockchain that operates on a Byzantine fault-tolerant consensus mechanism.
When a distributed ledger uses this mechanism, some nodes may provide inaccurate data for verification. These nodes can be corrupted and intentionally abuse the network. However, as long as the majority of validator nodes are honest, the verification process guarantees accuracy. As a result, it added more data to the chain despite the malicious behaviour of some of its nodes.
At Stellar, the verification process predicts from the start that some messages might be corrupt. However, as long as these malicious messages exceed one-third of the total, the data can be verified. Otherwise, the transaction is invalid.
How do Validators Work on the Blockchain?
To become a validator for a proof-of-stake blockchain, you must stake your wealth. Staking is a way to make your crypto assets work for you and potentially grow exponentially. This is achieved through the rewards you receive for submitting cryptocurrency to verify and confirm blockchain transactions. Below are the two most popular PoS networks using this system.
Validators on Ethereum (ETH)
While Ethereum started as a Proof-of-Work ledger, it slowly evolved into a Proof-of-Stake (PoS) consensus mechanism. Once the migration is complete, Ethereum participants will become validators by staking no less than 32 ETH.
The system randomly selects reviewers to create new blocks. They are responsible for reviewing and confirming blocks they have not made. The stake should encourage validators to provide accurate data and good behaviour. Otherwise, it could lose some of its equity.
How to Become a Validator on Ethereum
Once Ethereum sees the beacon chain upgrade complete, you should be able to bet on Ethereum. At this point, the network should upgrade to Ethereum 2 with more details on the proof-of-stake mechanism and rewards.
So far, to verify blocks on Ethereum, you need:
- Stake 32 ETH to become an overall validator or some ETH to join the staking pool.
- Run Eth1 or mainnet client or backend API.
- Batch transactions into a new block or check the work of other validators.
You can support the safe operation of the chain with these simple measures. In addition, you should avoid malicious activity, be offline or miss verification. Otherwise, you will lose a large part of your bet. In return for an honest review, you should get a 10% annual cut.
Validators on Solana (SOL)
Solana is a high throughput blockchain and one of several recent successful crypto projects. Since its launch in early 2020, it has quickly become the platform of choice for over 400 projects covering DeFi, NFTs, Web3 and more.
Solana uses Delegated Proof of Stake (DPoS) as the consensus mechanism. Anyone holding the platform’s native token, SOL, can participate in the verification process. However, you can delegate your SOL to a validator who will do all the work. This means that you do not need a minimum amount to wager. As a delegator, you can only have 1 SOL and remain an active member of Solana.
Validators receive stakes from delegators, increasing their chances of getting more slots and, therefore, more rewards.
As a delegator, you can withdraw your stakings at any time. You can do this without giving a reason, regardless of the performance of the validator.
How to Become a Solana Validator
On Solana, you can go beyond the role of the delegator and become a validator. However, you must meet additional requirements.
The prerequisite is that you understand how Solana works. The blockchain runs in epochs that can be between 2 and 3 days. Additionally, each epoch contains 420,000 blocks and a target block time of 400 milliseconds.
As a validator, you must vote on each block. To get the rewards, don’t miss any. More importantly, the reward is a factor in the vote’s success rate and your share relative to the rest of the network.
For example, if you hold 2% of the total network stake and vote on each block, you will receive 2% of the reward. And to achieve this feat, you need:
- Powerful server running on a 12-core/24-thread CPU at 2.8 GHz or higher
- Pay voting fees which can equal 1 SOL per day.
- Wager at least 5,000 SOL from your funds or 50,000 SOL from delegators.
Solana has been attracting investors at a rapid pace from September 2021. Therefore, the need to verify this blockchain should increase performance and cost. So it’s time to take action.
The Difference Between Validators vs Miners
Earning rewards for validating data on the blockchain can significantly increase your crypto holdings. And are miners and validators the same?
Miners are participants in a PoW-based blockchain that validate (mine) data without staking anything. Instead, they must invest in high-performance computers that can solve math problems quickly and efficiently. These machines are often expensive and have a heavy impact on the environment. Also, the long-term benefits of data mining may outweigh the costs involved.
On the other hand, participants in PoS-based blockchains need to deploy crypto assets to become validators. Instead of investing in expensive, polluting computers, they can buy digital coins.
Staking to become a validator reduces the cost of running the blockchain efficiently. As such, energy costs and regulations can change. Finally, it is more accessible and immune to the risks of wear and tear that mining machines face.
In summary, the roles of miners and validators are very similar. They must ensure that the networks they support to scale with accurate data. However, the way they enter the verification process differs significantly.
Blockchain technology brings us various possibilities of passive and active income. Being a validator in a decentralised ledger combines these two ways of acquiring wealth. First, you need a relatively powerful computer (node) to support the security and operation of the network. Secondly, as long as you meet all the requirements, your rewards can grow significantly in the background.
As the blockchain evolves, verification protocols will evolve and take new forms. So far, the role of the validator has become a lot from the original bitcoin miner to the current Solana validator. In the end, the main players in this blockchain technology are not only their seeders but also their reapers.