Running Your Own Node

50 minutes Full Sovereignty

Introduction: The Final Step to Sovereignty

You've secured your keys. You understand privacy. You've learned to manage UTXOs and protect your on-chain footprint. But there's one final piece to achieving true Bitcoin sovereignty: running your own node.

Without your own node, you're trusting someone else's computer to tell you the truth about Bitcoin. Is your transaction confirmed? You're trusting their node. Is the Bitcoin you received real? You're trusting their node. Are the consensus rules being followed? You're trusting their node.

Running your own node means verifying everything yourself. It's the difference between believing what you're told and knowing the truth.

Don't Trust, Verify

This phrase is the core ethos of Bitcoin. When you run your own node, you:

  • Verify every transaction follows the rules (no double-spends, valid signatures)
  • Verify every block is valid (correct proof-of-work, proper structure)
  • Verify the total supply has never been inflated beyond 21 million
  • Verify your received payments are actually confirmed on the real chain

Your node does all of this automatically, every 10 minutes, for every block since 2009.

Why Running a Node Matters

1. Privacy

When you use a light wallet (mobile wallet, most desktop wallets without a node), your wallet queries a third-party server to check your balances and broadcast transactions. This reveals:

  • Your IP address to the server operator
  • All your addresses (they learn which addresses you're interested in)
  • Your transaction history (they see what you're looking up)
  • Your balance (they can calculate your holdings)

With your own node, you query only yourself. No third party learns anything about your activity.

2. Security

Light wallets trust external servers to tell them the truth. A malicious or compromised server could:

  • Hide transactions: Make you think a payment wasn't received
  • Show fake confirmations: Trick you into thinking unconfirmed transactions are confirmed
  • Serve you a fake blockchain: In extreme cases, show you a different chain

Your own node validates everything independently. It can't be fooled about the state of the blockchain.

3. Network Health

Every node strengthens the Bitcoin network. More nodes mean:

  • More decentralization: No single point of failure or control
  • Better resistance to attacks: Harder to propagate invalid blocks or transactions
  • Enforcement of consensus rules: Miners can't change the rules if nodes reject invalid blocks

By running a node, you're not just protecting yourself—you're contributing to Bitcoin's resilience.

4. Sovereignty

Perhaps most importantly, running a node is the embodiment of Bitcoin's promise: be your own bank. You don't need permission to use Bitcoin, and you don't need to trust anyone to verify its rules. Your node is your vote on what Bitcoin is.

The 2017 Block Size War

In 2017, a group of miners and companies tried to change Bitcoin's consensus rules (SegWit2x). They had enormous hashpower backing them. But users running their own nodes rejected the changes, and the fork failed. This was proof that economic nodes—not miners—ultimately determine Bitcoin's rules.

Your node is your voice. Running one means you have a say in what Bitcoin is and isn't.

Node Types and Hardware Requirements

Before setting up a node, you need to understand your options. Different setups have different trade-offs in terms of cost, complexity, and capability.

Types of Nodes

Full Node (Archival)

Stores the entire blockchain history (currently ~600GB and growing). Can serve historical data to other nodes and wallets.

Pros:

  • Full verification of all historical transactions
  • Can rescan old wallets from any point in time
  • Serves data to the network (contributes to decentralization)
  • Required for running a block explorer or other services

Cons:

  • Requires ~600GB+ of fast storage (SSD recommended)
  • Initial sync takes 2-7 days depending on hardware
  • Higher ongoing storage requirements

Best for:

Users who want full capability, have the storage space, and want to support the network.

Pruned Node

Validates the entire blockchain during initial sync but only keeps the most recent blocks (configurable, minimum ~550MB). Still fully validates everything.

Pros:

  • Same security as full archival node—validates everything
  • Much smaller storage footprint (can run on 10-50GB)
  • Good for limited storage (laptops, small SSDs)

Cons:

  • Can't serve historical blocks to other nodes
  • Can't rescan wallets from before the pruning point
  • Initial sync still downloads and validates entire chain (just doesn't keep it)

Best for:

Users with limited storage who still want full validation. Great for personal use.

Dedicated Node Devices

Pre-built or DIY hardware specifically designed to run a Bitcoin node 24/7. Popular options include Raspberry Pi setups, Umbrel, Start9, and dedicated node boxes.

Pros:

  • Always-on node (available whenever you need it)
  • Dedicated resources (doesn't slow down your main computer)
  • Can run additional services (Lightning, block explorer, etc.)
  • Low power consumption (5-15W for Pi-based setups)

Cons:

  • Additional hardware cost ($200-600 for a complete setup)
  • Requires basic technical setup (though getting easier)
  • Takes up space and requires internet/power

Best for:

Users who want a professional setup, run Lightning, or prefer separation from their main computer.

Hardware Requirements

Component Minimum Recommended Notes
Storage 10GB (pruned) 1TB+ SSD (archival) SSD strongly recommended; HDD makes sync very slow
RAM 2GB 4-8GB More RAM = faster initial sync
CPU Any modern CPU Multi-core Initial sync is CPU-intensive
Internet Broadband (10+ Mbps) 50+ Mbps Initial sync downloads ~600GB
Upload Limit 50GB/month (min) Unlimited Full nodes serve data to others

Popular Dedicated Node Options

Raspberry Pi + External SSD (~$150-250)

The classic DIY option. Raspberry Pi 4 (4GB+ RAM) with a 1TB+ external SSD.

  • Software options: Umbrel, Start9, RaspiBlitz, MyNode
  • Pros: Cheap, educational, customizable
  • Cons: Slower initial sync, requires some technical setup

Old PC/Laptop (~$0-100)

Repurpose an old computer with an SSD upgrade. Any machine from the last 10 years can work.

  • Software: Bitcoin Core directly, or Umbrel on Ubuntu
  • Pros: Free if you have old hardware, faster than Pi
  • Cons: Higher power consumption, more space, potentially louder

Umbrel Home / Start9 Server (~$500-600)

Pre-built, plug-and-play node devices. Beautiful interfaces, easy setup.

  • Umbrel Home: Clean hardware + software package
  • Start9: Focus on privacy and self-hosting
  • Pros: Professional, easy, great user experience
  • Cons: More expensive than DIY

Cloud VPS (Not Recommended)

Running a node on AWS, DigitalOcean, or other cloud providers.

  • Pros: No hardware to manage, always-on
  • Cons: Defeats the purpose—you're trusting the cloud provider, costs add up, privacy concerns

Verdict: Only use for learning/testing. For real sovereignty, run hardware you control.

Start Simple

If you're new to running a node, start with Bitcoin Core on your existing computer (even pruned). Once you understand how it works, you can invest in dedicated hardware if desired. The best node is the one you actually run.

Installing Bitcoin Core

Bitcoin Core is the reference implementation of Bitcoin—the original software created by Satoshi Nakamoto and maintained by an open-source community. It's the most battle-tested and trusted way to run a node.

Step 1: Download Bitcoin Core

  1. Go to bitcoincore.org
  2. Download the version for your operating system (Windows, macOS, Linux)
  3. CRITICAL: Verify the download using the provided signatures

Always Verify Downloads

Bitcoin Core releases are cryptographically signed. Verifying the signature ensures you're running authentic software, not malware. The verification process is documented on the download page.

At minimum, verify the SHA256 checksum matches the one published on bitcoincore.org. For full security, verify the GPG signatures from multiple known developers.

Step 2: Initial Configuration

When you first launch Bitcoin Core, you'll be asked where to store the blockchain data. Consider:

  • Default location: Usually fine, but check you have enough space on that drive
  • Custom location: Point to an external SSD if your internal storage is limited
  • Pruned mode: Check "Prune block storage" if you have limited space (you can set the amount to keep)

Step 3: Initial Block Download (IBD)

The Initial Block Download is when your node downloads and validates the entire blockchain from January 2009 to present. This is the most resource-intensive phase:

  • Time: 2-7 days depending on hardware and internet speed
  • Download: ~600GB of data
  • CPU usage: High during validation (your computer may feel slow)
  • Disk I/O: Heavy writes—SSD strongly recommended

Tips for Faster Initial Sync

  • Use an SSD: HDD sync can take weeks; SSD takes days
  • Increase dbcache: Add -dbcache=4000 (4GB) if you have RAM to spare
  • Wired internet: Faster and more stable than WiFi
  • Let it run overnight: Don't stop and start repeatedly
  • Disable sleep/hibernate: Keep the computer running continuously

Step 4: Ongoing Operation

Once synced, your node needs to stay connected to keep up with new blocks:

  • Download: ~200-500MB per day (new blocks)
  • Upload: Variable depending on peers (can be significant if you serve blocks)
  • Resources: Minimal CPU and RAM when synced

You don't need to run your node 24/7. It will catch up when you restart it. But for Lightning or other services, always-on is preferable.

Essential Configuration

Bitcoin Core can be configured via the GUI settings or a configuration file (bitcoin.conf). Here are the most important settings for sovereign users.

Finding Your Configuration File

  • Windows: %APPDATA%\Bitcoin\bitcoin.conf
  • macOS: ~/Library/Application Support/Bitcoin/bitcoin.conf
  • Linux: ~/.bitcoin/bitcoin.conf

Create the file if it doesn't exist.

Recommended Configuration

# bitcoin.conf example

# Server settings (required to connect wallets)

server=1

 

# RPC authentication (CHANGE THIS!)

rpcuser=yourusername

rpcpassword=your_secure_password_here

 

# Pruning (uncomment if limited storage)

# prune=50000 # Keep ~50GB of blocks

 

# Memory optimization during IBD

dbcache=2000 # 2GB RAM for database

 

# Network limits (optional)

# maxuploadtarget=500 # Limit upload to 500MB/day

 

# Tor integration (see next section)

# proxy=127.0.0.1:9050

# listen=1

# bind=127.0.0.1

Important Settings Explained

server=1

Enables RPC server, which allows external wallets (like Sparrow) to connect to your node.

rpcuser / rpcpassword

Authentication credentials for connecting to your node. Choose a strong, unique password. Alternatively, use rpcauth for hashed credentials (more secure).

prune=N

Enables pruning mode, keeping only N megabytes of recent blocks. Minimum is 550. Setting prune=50000 keeps about 50GB. Your node still validates everything—it just doesn't store old blocks.

dbcache=N

Amount of RAM (in MB) to use for the database cache. Higher values speed up initial sync. Don't set this higher than your available RAM minus what your OS needs.

maxuploadtarget=N

Limits how much data you upload to other nodes (in MB per day). Useful if you have bandwidth caps. Set to 0 for no limit (recommended if you can).

Tor Integration

For maximum privacy, run your node over Tor. This hides your IP address from other Bitcoin nodes and prevents your ISP from seeing your Bitcoin activity.

Why Use Tor?

  • IP privacy: Other nodes don't learn your real IP address
  • ISP privacy: Your ISP can't see you're running a Bitcoin node
  • Censorship resistance: Tor makes it harder to block Bitcoin traffic
  • No port forwarding: Tor allows incoming connections without router configuration

Setting Up Tor

Step 1: Install Tor

  • Windows: Download Tor Expert Bundle from torproject.org
  • macOS: brew install tor (via Homebrew)
  • Linux: sudo apt install tor (Debian/Ubuntu)

Step 2: Configure Bitcoin Core for Tor

Add these lines to your bitcoin.conf:

# Route all connections through Tor

proxy=127.0.0.1:9050

 

# Listen for incoming connections

listen=1

 

# Only accept local connections (for your wallets)

bind=127.0.0.1

 

# Optional: Connect only via Tor (no clearnet)

# onlynet=onion

Step 3: Start Tor, Then Bitcoin Core

Make sure Tor is running before you start Bitcoin Core. Your node will automatically create a Tor hidden service (.onion address) so other Tor nodes can connect to you.

Tor Trade-offs

Slower connections: Tor adds latency. Initial sync will be slower over Tor. Consider syncing over clearnet first, then switching to Tor for ongoing operation.

Fewer peers: Tor-only mode has fewer available peers. The hybrid approach (Tor proxy without onlynet=onion) balances privacy and connectivity.

Connecting Your Wallet

Once your node is synced, you can connect your wallet software to use your node instead of third-party servers. This is where the privacy and security benefits become real.

Sparrow Wallet

Sparrow has excellent node integration:

  1. Open Sparrow Wallet
  2. Go to File → Preferences → Server
  3. Select Bitcoin Core
  4. Enter your node's details:
    • URL: 127.0.0.1 (if node is on same computer)
    • Port: 8332 (default RPC port)
    • User/Pass: Your rpcuser and rpcpassword
  5. Click Test Connection

Electrum

Electrum can connect to your node via Electrum Personal Server (EPS) or Electrs. Setup is more involved but provides the same privacy benefits.

Hardware Wallets

Most hardware wallets can be used with Sparrow connected to your node. This gives you the security of hardware signing with the privacy of your own node.

Node Software Bundles

If this seems complex, consider node software like Umbrel or Start9. They bundle Bitcoin Core, Electrum server, Lightning, and more into a user-friendly package with automatic wallet connection setup.

Beyond Core: Lightning and More

Once you're running a Bitcoin node, you can add additional services:

Lightning Network Node

Running a Lightning node (LND, Core Lightning, Eclair) on top of your Bitcoin node enables:

  • Instant, low-fee payments
  • Running your own Lightning wallet
  • Routing payments for others (optional, can earn fees)
  • Opening channels with full privacy (your node, your channels)

Block Explorer

Run your own block explorer (like Mempool.space self-hosted) to look up transactions privately without revealing your interest to public explorers.

BTCPay Server

Accept Bitcoin payments for a business with full sovereignty—no payment processor, no fees, no KYC. BTCPay Server runs on top of your node.

Electrum Server

Run Electrs or Electrum Personal Server to use Electrum wallet (or other Electrum-compatible wallets) with your own node.

Interactive: Node Setup Sandbox

Explore node configuration options and hardware requirements in a simulated environment. Practice setting up Bitcoin Core, Electrs, and Tor without risking your actual system.

Launch Node Setup Sandbox →

Learn node configuration and understand hardware requirements before setting up your real node!

Key Takeaways: Running Your Own Node

  • Running a node = full sovereignty. You verify every transaction and block yourself, trusting no third party to tell you the state of Bitcoin.
  • Privacy requires your own node. Light wallets leak your addresses to third-party servers. Your node keeps your activity private.
  • Hardware requirements are modest. Any computer with an SSD can run a node. Pruned mode reduces storage needs dramatically.
  • Initial sync takes time. Plan for 2-7 days of syncing. Use an SSD and good internet to speed it up.
  • Tor adds privacy. Running over Tor hides your IP from other nodes and your ISP from seeing your Bitcoin activity.
  • Connect your wallet to your node. Use Sparrow or similar software connected to your node for the full sovereignty experience.
  • Dedicated hardware is optional but nice. Raspberry Pi setups or plug-and-play devices like Umbrel make 24/7 node operation easy.
  • Your node is your vote. Running a node enforces the consensus rules you believe in. It's how users maintain power over Bitcoin's direction.
  • Start simple, upgrade later. Begin with Bitcoin Core on your existing computer. Add Tor, dedicated hardware, and Lightning as you get comfortable.

Congratulations!

You've completed Stage 2: Privacy and Anonymity. You now understand blockchain analysis, UTXO management, CoinJoin (Module 2), and running your own node. Combined with Stage 1's security fundamentals, you have the knowledge for true Bitcoin sovereignty.

The remaining stages cover advanced topics: inheritance planning, multisig governance, and maintaining sovereignty over time. The foundation you've built here will serve you well.