It looks like there are no incentives to run a node except for commercial self-interest?

There are no mining rewards. Why should I run a node. Why do others run nodes

The Nano network does not require a financial incentive to run nodes. It’s actually not an issue and already proven to work with hundreds of nodes participating. Why do people run Tor nodes or expensive seedboxes for Torrents? Many node operators simply run a node to strengthen the network and thus help protect their own investment. To help ensure the stability and accessibility they want, they freely participate upkeep. Nano nodes are just that, to ensure your transactions are being processed by a trusted entity, either yourself or someone else. At the same time, aiding the network without having to rely on a third-party.

The goal is to make the cost of running such a node trivial. Financial incentives are not always the goal within a system and such a thing can actually ruin a cryptocurrency, as can be seen from all the forks, hash wars and centralization in certain areas with cheap electricity and labour. It’s a phenomenon called emergent-centralization described by Colin LeMahieu.

More on this topic can be found in these articles:

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Answer is in the question. Self interest is generally a decent incentive. :wink:

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Another benefit of running node, specifically getting to a Principal Representative status, is the good PR that comes with that within the Nano community. We've seen more and more services, wallets and businesses get excited about the opportunity to have their brand seen attached to a well-performing node and that adds some additional incentive.

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While a small business could get by using a wallet app like Natrium without having to run a node, a larger business will want a more robust point of sale that will run a node behind it and like credit card machines there will likely be 100’s of different PoS providers.

Almost any large business that decides to use nano where deposits/withdraws or payments are processed will likely run a node. It won’t be all business, some like a merchant with a point-of-sale device will likely use the node that the PoS provider runs. For example Kappture in the UK runs a principle representative node to process payments for their clients.

Exchanges that do significant deposit/withdrawals and manage unique addresses per user for deposits like Binance, Kraken, Wirex etc etc all run their own node to interact with the network and manage the accounts.

I would say the primary reason a business will run a node is to interact with the network. Many smaller business will use 3rd parties but there will be sufficient large businesses and exchanges and payment processors for decentralization.

Once a business like Binance or Kraken have sufficient nano holdings they will want to enable voting to help secure the network so it doesn’t impact their service.

Otherwise for the general enthusiast it’s primarily altruism. I run https://nano-faucet.org and run my own node for the faucet and will continue to do so.

The nice thing about nano is that the TPS limit increases as hardware specs and bandwidth of PR nodes increase and over time hardware continues to improve rapidly which should help keep pushing the limit up as adoption increases.

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Just another point: Bitcoin users don't have any incentive to run a node either. Only miners have incentive, where they aren't required to run a public facing node (i.e. a port open on the public Internet).

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There is no direct-fee incentive, but that's not the same as no incentive. We already have a number of nodes from businesses that are incentivized to do so (Binance, Wirex, Kucoin, Kappture, BrainBlocks, etc). Some of the financial incentives include:

  • Cost reduction

  • Loss aversion

  • Marketing/advertising

  • Profit maximization

There are also non-financial incentives like:

  • Community building & peer recognition

  • Censorship resistance (controlling your own money)

  • Ideological support (e.g. for open financial systems or green alternatives)

  • Securely interacting with the Nano network for some development project

The cost of consensus in Nano is so low that the benefits of the network itself are all the incentive you need. Whales and businesses that benefit from Nano (e.g. exchanges, merchant payments, etc) will run nodes to protect their investment and secure the network. Similar to TCP/IP, email servers, and HTTP servers. Just like Bitcoin full nodes.

We also don't need everyone to run a node. We only need enough to make collusion and denial of service attacks impractical, and that can happen with "only" 100s of nodes.

Another benefit of Nano's indirect incentive model is that it leads to less emergent centralization over time. In other cryptocurrencies with mining or fees (including traditional PoS coins), profit maximization and economies of scale lead to centralization over time. Nano doesn't have that problem, and you can see for yourself as it continues to get more decentralized over time (scroll down to the vote weight distribution chart and play with the time period): https://nanocharts.info/

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