Data collected from Bitnodes reveals that over the course of this year, the number of reachable nodes that were a part of the Bitcoin blockchain has reduced from a total of 11,845 to a meagre number of 9,597. Overall, this represents a 18.98 or nearly 19% fall since last year. The fall in the number of unreachable nodes has been much higher over the course of the same duration. It fell by around 33%, from a high value of 98000 to a comparative low of 65500.
What are these reachable and unreachable nodes?
Nodes are the participating computers in the Bitcoin blockchain and there is a distinction between reachable and unreachable ones. While reachable nodes can both receive as well as send connections within the blockchain network, unreachable nodes, like the name suggests, cannot be reached. This means that unreachable nodes cannot receive any incoming connection but can only send out outgoing ones. Unreachable nodes are usually shielded by a firewall it hidden behind an NAT protection. NAT refers to a Network Address Translation, which serves to alter the information regarding a given network’s address in the IP header of the data packets when the information is traveling via a router.
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So what does the fall imply?
Normally, it is essential to have high numbers of both reachable as well as unreachable nodes. This is because, while reachable nodes function as full nodes, unreachable nodes bolster the security of the network in question. The fall in the numbers therefore represents a decline in both the security strength as well as the decentralized characteristic of a blockchain network. The fewer the number of full nodes, the higher the possibility of centralization in the network.
A possible reason for this decline may be the withdrawal of several small miners from the network, discouraged by the falling prices of Bitcoin, which recently fell to lower than $3900.