LeoGlossary: Node

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A physical device that is part of a network. It allows for the sending, receiving, and storing of information. A computer is the most common node which can also include smartphones. This is known as a computer or Internet node.

The node type depends upon the network it is connected to.


Types of Nodes

  • Computer
  • Internet
  • Distributed Systems
  • Telephone
  • Cable TV Systems


All systems have physical devices that allow for the transfer of data throughout the network. Node can serve functions with the information it receives. Some will store it while other simply act as a relay.

The size of a network is dependent upon the number of nodes connected. Many look at the Internet itself as a network, since all devices tied to this medium are connected. From there it scales down.

Businesses run their own networks. They have nodes that are only accessible to their employees. In the era of cloud computing, most servers are rented from companies such as Amazon Web Services or Microsoft.

The databases are accessed from locations separate from where the servers are located. This is a change from the past where most data was stored on site.

Software runs on top of the nodes.

This is evident when we look at a smartphone or computer. There are a number of programs running, all housed on that particular node. Servers, routers, and other devices have software providing instructions to perform the different services.

As we move into mixed reality, the headsets and other devices that are being developed will also be nodes on these networks.

Node Ownership

Nodes are owned by the individual who purchased this. This means many operations are carried out on devices that are under the control of others.

End devices can be fairly self evident as a phone, tablet, or laptop is the property individual or business that bought it. Servers are another matter. The infrastructure here is often owned by a company that rents it to individuals. This causes issues with the data that is generated as, so far, the technology companies have asserted it is their property.

We see this with social media. A platform like Twitter (X) or Facebook has users all over the world. All access is done through one's account, which is property of the application. The data created is placed on the servers of the companies that own the platforms. This means the user is simply a guest, accessing the data only with permission. If the account is closed, access to the data disappears.

Blockchain is a new model that changes the ownership of the traditional node system.

Under this scenario, the data is mirrored on multiple servers, with nodes not related to each other (in their ownership). The idea is to have distributed storage of the data. If one node goes down, others have the same ledger information.

Obviously, corporations do something similar with their data. The difference is every node with data is under the control of that company. Blockchain seeks to distribute the ownership.

Digital Networks

The major transformation over the last 40 years was the switch from analog to digital. This altered all parts of society. It also caused a massive explosion of nodes.

Estimated vary on how many nodes are connected to the Internet but it is getting into the hundreds of billions. For decades, one thing that is forecast is the Internet-of-Things (IoT). This is where most devices have a chip in it and is connected to a network. We see this with appliances, televisions, and home security systems. Automobiles like those produced by Tesla are really mobile nodes, connected to the cloud.

This has changed the financial system and money.

A monetary system is a combination of accounting and a communication system. In this era, the latter is a digital network of nodes that interact with each other.

Financial institutions all run their own networks, which are tied to larger ones. For example, a commercial bank will have a network made up of nodes that all communication directly. Since they are part of the Federal Reserve System, that network will interact with the Fed's.

The reduction in the use of physical money such as banknotes or coins means that money is really numbers on a screen. Another way of describing this is ledger based money.

Without the physical components, money is basically data running on different nodes around the world. Banking and payment applications that people use on their smartphones are examples of what occurred.


The speed of communications keeps increasing. This is a trend that is likely to continue.

Individuals nodes are able to process data faster due to advancements in processors along with newer software stacks. We also see communication networks getting faster especially in the wireless realm. This includes both mobile phone networks as well as WiFi.

Moving data faster between nodes shows how all aspects of business is changing. This is true regardless of what the data is associated with, including money.

Video, audio, and other forms of media now can be moved around the world in a few hundred milliseconds.


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