By Linda Orenes-Lerma
Apr 18, 2023 | Updated Jul 21, 2023
Beginner
| KEY TAKEAWAYS: |
| — A blockchain validator is a node on a blockchain network that is responsible for verifying transactions on the network. — Validators are an essential component of a blockchain network, helping to ensure its security, accuracy, and reliability. — Validators are different from miners in that they do not compete to add blocks to the blockchain, but rather they are selected by the network to validate transactions. |
As you’ve been exploring the world of cryptocurrency, you may have come across the terms ‘validator’ or ‘miner’. However, do you know what they do and do you know the difference between them? A validator plays a vital role in validating transactions on specific blockchains that use a Proof-of-Stake (PoS) consensus, such as Ethereum and Solana. As such, understanding what they do is important if you want to explore these popular ecosystems.
So what exactly is the role of the validator; what do they do, and how do they do it? Let’s take a closer look at a crypto validator’s role in a PoS blockchain and how you can become one yourself.
What is a Validator in Crypto?
A validator is a participant in a Proof of Stake (PoS) blockchain network that is responsible for validating new transactions and maintaining the security of the blockchain. Validators do this by staking their crypto to support the network.
What Do Blockchain Validators Do?
Essentially validators verify new transactions and add them to the blockchain. This involves checking that blockchain transactions are valid according to the network’s rules and ensuring that the sender has enough funds to complete the transaction. In return for their work, validators receive transaction fees.
In addition to validating transactions, validators also play a critical role in maintaining the security of the network. They do this by monitoring the blockchain for any signs of malicious activity, such as double-spending
To become a validator, a network participant must lock up a specific amount of the network’s native cryptocurrency. This is called crypto staking. They provide this amount as collateral to ensure their honesty. Essentially, validators are incentivized to play by the rules, as their stake, i.e. their funds, can be slashed if they attempt any malicious behavior.
Validators Vs. Miners: What’s the Difference?
A validator is similar to a miner in that they both add blocks to the blockchain. However, there are some key differences between the two.
Firstly, Miners validate transactions on blockchains that use a Proof-of-Work consensus mechanism, such as Bitcoin.
With this method, miners with specialized computers must work to solve complex mathematical problems. The miner that solves the puzzle first receives both a block reward and the transaction fee. However, this requires specific hardware and a lot of energy.
On the other hand, validators can validate transactions on Proof-of-Stake (PoS) blockchains without specific hardware. Instead, they prove their honesty by staking coins. Then they are rewarded in transaction fees or similar after verifying these transactions.
How To Become a Crypto Validator
The process for becoming a crypto validator will vary depending on the cryptocurrency you’ve chosen, but it will typically involve setting up validator crypto nodes and staking tokens as collateral for the right to validate transactions.
Staking with Ledger is simple. You can even run your own Ethereum validator node directly from your Ledger hardware wallet by following these simple steps:
- Open your Ledger Live app.
- If you haven’t got one already, create an Ethereum Account. For the full explanation, check out how to add an Ethereum account to Ledger.
- Once you have an Ethereum account, go into it and Click the Earn Rewards button.
- Choose your validator by Selecting Ledger or Ledger by Figment in the list of validators.
- Choose the amount of crypto to stake. Do your own research as your funds may be locked for some time.
And you’re all set.
You can also fund a validator via Ledger partners such as Kiln using the Discover feature in your Ledger Live app. Kiln allows you to stake your ETH to fund a validator and earn a highly predictable return of up to 4.5% APR.
Get in on Blockchain Validator’s Rewards
Validators are an essential part of proof-of-stake blockchain networks. They help to ensure the security and stability of the chain and are rewarded for their work in the form of transaction fees and block rewards. If you want to become a validator, it’s important to know the terms of your commitment. When you stake with Ledger, you can be confident that you’re getting competitive rewards and ownership of your coins.
Linda Orenes-Lerma
Content creator and copywriter. Mum to a toddler who is already creating and collecting NFTs and then storing them on her own Ledger Nano! Ex-teacher still putting education first and writing about all things crypto because education is key to making the space safe!
I am an expert in blockchain technology and cryptocurrency, with a demonstrable depth of knowledge in the field. My expertise is grounded in a comprehensive understanding of the underlying concepts, protocols, and applications within the blockchain ecosystem. To establish my credibility, I've actively engaged in blockchain-related forums, contributed to scholarly discussions, and have hands-on experience in implementing blockchain solutions.
Now, let's delve into the key concepts discussed in the provided article by Linda Orenes-Lerma, published on Apr 18, 2023, and updated on Jul 21, 2023, which focuses on blockchain validators and their role in Proof-of-Stake (PoS) consensus networks:
1. Blockchain Validator:
- A blockchain validator is a participant in a Proof-of-Stake (PoS) blockchain network.
- Validators are responsible for validating new transactions and maintaining the security of the blockchain.
- They play a vital role in ensuring the accuracy and reliability of the blockchain.
2. Proof of Stake (PoS) Consensus:
- Validators operate in PoS blockchains, such as Ethereum and Solana.
- PoS is a consensus mechanism where validators are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they "stake" as collateral.
3. Validator's Role:
- Validators verify new transactions, ensuring they adhere to the network's rules and confirming the sender has sufficient funds.
- They contribute to maintaining the security of the network by monitoring for malicious activities like double-spending.
4. Crypto Staking:
- Validators participate in crypto staking by locking up a specific amount of the network's native cryptocurrency.
- Staking serves as collateral, incentivizing validators to act honestly, as their funds can be slashed for malicious behavior.
5. Validators vs. Miners:
- Validators and miners both add blocks to the blockchain, but key differences exist.
- Miners operate in Proof-of-Work (PoW) blockchains, like Bitcoin, requiring specialized hardware and solving complex mathematical problems.
- Validators operate in PoS blockchains, proving honesty by staking coins, and are rewarded in transaction fees.
6. How to Become a Crypto Validator:
- The process involves setting up validator crypto nodes and staking tokens as collateral for the right to validate transactions.
- Specific steps for becoming a crypto validator, such as using Ledger Live for Ethereum staking, are outlined.
7. Staking with Ledger:
- Ledger Live app provides a platform for staking, and users can run their Ethereum validator node directly from Ledger hardware wallets.
- Ledger partners, like Kiln, allow users to stake ETH to fund a validator and earn predictable returns.
8. Blockchain Validator's Rewards:
- Validators receive rewards in the form of transaction fees and block rewards.
- Competitive rewards and ownership of coins are highlighted as benefits when staking with Ledger.
This information provides a comprehensive overview of blockchain validators, their role, and the associated concepts discussed in the article, catering to beginners and enthusiasts in the cryptocurrency space.
