Familiarize yourself with the benefits of participating with blockchain nodes and find out how licensed financial entities can become a Polymesh node operator.
One of the most common questions we receive is “how do I become a blockchain node operator?”.
But not just anyone can become a Polymesh node operator (an entity who operates an authoring node). Only licensed financial entities who are approved by Polymesh governance can operate the blockchain nodes that validate transactions–we’ll get into why below.
No license? No problem! You can still view the Polymesh blockchain (and benefit from using your own node infrastructure) by deploying a regular blockchain node with Docker. This blog post shows you how to get started with blockchain nodes on Polymesh, whether you’re looking to run a regular node or you’re a licensed financial entity interested in becoming a Polymesh node operator.
Let’s start with a refresh on blockchain.
Blockchain is a form of distributed ledger technology (DLT) whereby data is distributed digitally across a network of multiple participants and stored in blocks which are chained together– hence the name blockchain!
Blocks are broadcasted and added to the blockchain by blockchain nodes. Like computer servers, blockchain nodes uphold the distributed ledger by keeping track of the blockchain and exchanging the latest data with each other, helping the other blockchain nodes stay up to date.
Each blockchain node contains a full copy of the distributed ledger and its transaction history. Since blockchain nodes store and preserve the blockchain, you can say that a blockchain exists on blockchain nodes.
On Polymesh, anyone can run a blockchain node that broadcasts the blockchain network, reads its data, and submits transactions to the chain. However, blockchain nodes that validate new blocks can only be run by a blockchain node operator, who must be a licensed financial entity.
When you use Polymesh user interfaces such as the Polymesh Dashboard or applications such as Token Studio, you’re connecting to regular Polymesh nodes (blockchain nodes used to read from and submit transactions to the blockchain).
While there’s nothing wrong with relying on public nodes initially, if interacting with Polymesh is critical to your business, you might want to consider running a regular blockchain node on Polymesh yourself. That way you’ll have full control over your own infrastructure and won’t have to worry about your operations being impacted by external factors.
Here are a few reasons why running your own node can be beneficial:
Expanding on the last point, with public nodes there’s always a risk that the individual or entity running the node can intercept the transaction or response, which can have problematic consequences for your business. So from a reliability and security perspective, it’s strongly recommended for those integrating with the blockchain to deploy a full blockchain node themselves.
Docker is an open source containerization platform which allows developers to pack, ship, and run any application as a lightweight, portable, self-sufficient container. We offer precompiled Docker container images of Polymesh that allow a user to quickly deploy the Polymesh software and its dependencies, along with a Docker-Compose file that can be used to quickly deploy a Polymesh node as part of a multi container environment.
For further information on deployment of a full blockchain node on Polymesh with Docker, see the developer portal docs. Note that the guide was written based on Ubuntu 20.04, but the instructions should be similar for other platforms.
Setting up a node is often a highly laborious and time-consuming process that can be blocked by technical challenges, lack of competence, or limited knowledge. Node providers provide a key service to startups and companies looking to get engaged with blockchain by eliminating many of the problems involved in implementing nodes.
An example of a node provider that Polymesh participants can use is staking and infrastructure provider RadiumBlock, whose flagship node-as-a-service makes it easy for companies to implement and maintain a node on Polymesh by installing and configuring nodes on their behalf. RadiumBlock’s node-as-a-service was a crucial component in the node setup for Greentrail, one of Polymesh’s node operators.
Block producers who validate transactions on Polymesh must be licensed financial entities for reasons that have to do with security and compliance.
While Polymesh has multiple use-cases, its infrastructure is purpose-built to provide institutions with a safe, compliance-facilitating blockchain for tokenizing regulated assets. One key component of this is Polymesh’s unique use of permissioning on a public network.
Permissioning on Polymesh takes two forms. At the user-level, all new users are required to verify their identity during onboarding with a customer due diligence provider. The operator-level involves permissioning too, with node operators required to complete a Know-Your-Business process and become approved by Polymesh governance.
In the case of node operators, permissioning is an important step to ensuring transactions are written to the chain only by known, trusted entities–a key requirement for institutions interacting with regulated digital assets.
Privately held companies or regulated financial entities, for example, often need to ensure they’re only participating in transactions with individuals with known or approved identities. Moreover, it’s important that the chain can only be maintained by entities who can be trusted not to initiate a consensus-based attack or re-write transactions or rules for their own benefit. Finally, it just won’t do if there’s even a slight possibility that the entities you’re interacting with are terrorist organizations or other entities on an OFAC blacklist.
The best way to guarantee this? Ensuring that the participants who influence the blockchain’s consensus algorithm are also regulated financial entities.
If you’re a licensed financial entity and want to get involved with Polymesh, consider becoming a blockchain node operator!
As a node operator on Polymesh, you’ll get all the benefits of running a regular node on Polymesh. In addition, you’ll help to keep the blockchain secure and operational at all times by managing and running the nodes that author new blocks and vote on block finality.
Node operators on Polymesh run the chain’s software, certifying transactions as they’re entered into the chain by writing new blocks and broadcasting them to the network. Node operators also process blocks based on transactions that follow the blockchain’s protocol rules.
Node operators duties can be summarized into 3 primary roles:
As a Polymesh node operator, you’ll be part of the world’s most sophisticated blockchain for security tokens and be poised to help guide this revolutionary industry that’s changing finance as we know it.
Collaborating with the market leader and the many tokenization companies within the Polymesh ecosystem will bring you valuable insights about blockchain and security tokens.
With low infrastructure and operational costs, you’ll be able to benefit from working with the blockchain without needing to create your own. (And if running a node appears too daunting or technical, you can also work with a node provider to shoulder the technical difficulties of setting up your own node).
Last but not least, you’ll receive rewards! Node operators earn block rewards and transaction fees in the form of POLYX for maintaining the blockchain.
First, we recommend you read up on Polymesh node operators and familiarize yourself with their role and place within Polymesh tokenomics. You can easily find out more specifics by downloading our guide to Polymesh tokenomics for node operators.
You might also want to familiarize yourself with blockchain regulation in your jurisdiction to ensure you understand any legal or tax implications around your participation.
Next, you can contact us to let us know your interest in becoming a Polymesh node operator. If you meet the criteria of being a licensed financial entity, we’ll ask you to complete a short application to collect and/or verify information about your business and its directors. This information will be compared against the Office of Foreign Assets Control (OFAC), European Union (EU), and United Nations (UN) sanctions lists.
From there, we’ll notify you of any next steps should your application be accepted. Learn more about becoming a Polymesh node operator.