What Is a Validator in Crypto?

Validators are the key to securing many of the largest and most popular crypto networks, including Ethereum and Solana. For anyone trying to gain a strong understanding of the crypto space, learning what validators are and how they work is essential. So, what is a validator in crypto?

A validator in crypto is a participant or node in a blockchain network responsible for verifying transactions, ensuring they follow the network’s rules, and adding them to the blockchain. Validators play a crucial role in maintaining the security, accuracy, and integrity of many decentralized blockchain systems.

To understand the role of validators in detail, let’s explore what validators are in blockchain, how they work, and their impact on the blockchain network.

What Is a Blockchain Validator?

Now that we know the basic role of validators, let’s go into more detail and explore how they function in blockchain networks. Blockchains are often called ‘permissionless’ because no central authority or banks are needed for validating transactions. Once you initiate a cryptocurrency transaction, the blockchain network verifies and approves it. This work is conducted by a network of independent validators who adhere to established network protocols.

Validators are crucial for maintaining the blockchain’s consensus and preventing fraud. Approvals from a group of validators confirm the legitimacy of every transaction in a blockchain, known as the consensus mechanism.

There are many different consensus mechanisms that blockchain networks use, though some use the same or similar mechanisms. The type of validators required to maintain consensus depends on the specific mechanisms in place.

Validators’ roles are crucial in consensus mechanisms such as Proof of Stake (PoS), used by Ethereum, and Delegated Proof of Stake (DPoS), used by Solana, in which they verify transactions and help secure the network.

In Proof of Work (PoW) consensus mechanisms (like Bitcoin’s), a similar role is played by miners, who validate transactions by solving complex puzzles, though they are not typically called validators. So, while validation is important across all these mechanisms, the term ‘validator’ is most accurately used in PoS and DPoS systems.

How Do Blockchain Validators Work?

Typically, in the Proof of Stake (PoS) mechanism, participants have to stake some of their coins or tokens to serve as validators. In turn, validators are rewarded by the network for their contributions. To help you understand how validators work in blockchain, each step of the Proof of Stake (PoS) mechanism is described below:

Staking

Staking is the selection step where users lock up a certain amount of cryptocurrency to participate as validators. This amount serves as collateral, meaning they forfeit some or all of the deposit if they act maliciously or fail to meet their obligations (called slashing). The selection process varies depending on the blockchain platform. Each network has its own unique rules for determining which participants will be selected as validators. Factors influencing the selection could be:

Stake amount
Staking duration
Uptime (availability)
Combination of factors
Randomness

Transaction Validation

In the process of transaction validation, crypto validators receive new transaction data that is waiting to be verified. They process the transaction and confirm the accuracy of the information, such as:

Whether the sender has sufficient funds for the requested transaction
Whether the transactions have the correct format
Whether the transactions follow the network’s rules.

Block Creation

Validators check and verify blocks containing multiple transactions. Once they ensure a block is valid, ensuring it adheres to a predetermined size and cryptographic rules, the validators propose it to the network. This ensures that no invalid or malicious blocks are added to the chain.

Consensus Participation

After validating transactions and the block, validators participate in the consensus mechanism. They vote on whether to add the block to the blockchain. However, this voting process varies based on the consensus protocols of the network.

Block Addition

A blockchain is a digital ledger where every user and validator maintains an exact copy. Once consensus is reached, a new block is added to the blockchain, and all crypto validators update their copies. This ensures that all validators have an up-to-date copy of the blockchain.

Rewards and Penalties

Validators who perform their duties honestly are typically rewarded with a portion of the transaction fees, newly minted native coins, or both, depending on the blockchain. However, for fraud or malicious behavior, validators can receive penalties such as being slashed (a portion of their stake being taken) or banned (either temporarily or permanently) from being validators.

PoS vs. PoW

A PoW-based blockchain, such as Bitcoin, uses miners who solve complex mathematical puzzles for validating and proposing blocks. PoW mining requires a significant amount of computing power, making it energy-intensive. Compared to PoW, the PoS mechanism is less energy-intensive. If PoS validators want to act maliciously, they need to secure a majority of the validators and potentially lose their stakes due to the risk of slashing. This would likely never make economical sense, making a full takeover extremely unlikely.

Proof-of-Work (PoW) and Proof of Stake (PoS) require the majority of the validators to reach a consensus. These mechanisms aim to achieve Byzantine Fault Tolerance (BFT) to ensure the system remains functional even if some crypto validators act maliciously or fail to operate.

Why Are Blockchain Validators So Important?

The importance of validators is underscored by their rapid adoption, even among large enterprises. As of 2025, 60% of sampled blockchain networks have at least one enterprise validator, and the Proof of Stake staking market capitalization has reached $210 billion USD, with an annualized market opportunity for staking rewards of $11 billion. This trend highlights just how vital validators are for the ongoing growth and trust in blockchain technology.

Since validators verify all information before it is added to the blockchain, anyone can use the blockchain without needing a central authority. People trust a blockchain network because validators prevent fraud while recording transactions in a secure and automated manner. And without validators, a decentralized system would fall apart.

Validators vs. Miners

Miners are the validators in PoW-based cryptocurrencies who solve complex mathematical problems to validate transactions and add blocks. A key difference between miners and validators is the use of computational power. Anyone can become a miner in PoW systems as long as they have the computational power required to solve mathematical puzzles and to propose blocks.

However, PoS networks allow only a select few to become PoS validators, often based on the number of staked coins. Thus, less computational power is used here, making it more energy-efficient than PoW.

Miners are often rewarded with newly minted coins and transaction fees (from their verified transactions) for proposing blocks to the blockchain. While PoS validators are typically rewarded with transaction fees, they sometimes receive newly minted coins as rewards as well. The total amount of earned rewards is shared among all the validators based on their staking proportion.

Blockchains like Bitcoin use miners, while others like Ethereum and Cardano use PoS validators. Some blockchains utilize hybrid models where several models are used in conjunction. An example is Decred, which operates using both PoW and PoS mechanisms.

How to Start Your Own Crypto Validator Node

It’s often not easy to start your own crypto validator node, but as long as you have the resources required to do so (like strong hardware and the minimum amount of staked coins), it can be done by anyone. To become a crypto validator, you can follow the steps below:

1. Choose a Blockchain Network

It’s often best to choose a network with a high transaction volume and a high demand for validators. Study consensus mechanisms, validator requirements, rewards figures, and other details of the blockchains to select the most suitable one.

2. Meet Technical Requirements

For validation processes, you need resources such as a computer with adequate hardware specifications, including sufficient RAM, storage, and a suitable CPU. You will also likely need very good and consistent internet to ensure that you don’t get slashed. Check the hardware requirements of your selected blockchain before proceeding.

3. Install and Configure the Validator Software

Follow the official documentation of your chosen blockchain to properly install and configure the client software.

4. Secure Your Keys

Generate a strong pair of keys in order to secure your validator node. These keys are needed to protect your staked coins and sign transactions. Look for ways to securely store your keys and have a backup plan in case you lose them. Losing the keys can lead to losing your staked coins and access to the validator nodes.

5. Create a Wallet

You will likely also need to open a dedicated wallet account where you can transfer your rewards and staked coins. Ensure the wallet‘s security by using strong passwords and strong network security measures.

6. Stake Required Tokens

Collect the necessary cryptocurrency to stake as collateral as per the staking requirements of your chosen network. For example, you would need at least 32 ETH to start an Ethereum validator. If you don’t have enough coins yourself, you can try pooling your resources with others using validator pools or staking sites like Lido.

7. Start Validating

Once selected, run the node in your client software. Sync the up-to-date blockchain data on your computer, and hopefully, you should be ready to start validating transactions.

8. Monitor and Maintain

Regularly check the node’s performance by evaluating key metrics, such as uptime, block production rates, and rewards earned on the blockchain’s provided dashboard. Additionally, update your software regularly to stay current with the latest network changes.

Most validators use dedicated hosting or trusted cloud-based services. Cloud-based solutions allow validators to run smaller projects or light validator nodes with lower upfront costs.

Is Running a Validator Node Worth It?

The cost of running validator nodes depends on several factors, including:

Prices of hardware components
Cost of high-speed, stable internet
Investment in gathering technical expertise from online courses or formal education
Time spent on validating transactions and securing the blockchain

Starting a validator node isn’t risk-free. Attempts like double signing, extended periods of inactivity (downtime), and network security violations can lead to penalties like slashing. However, if you aren’t trying to do anything malicious, have the hardware and internet connection you need, and check in regularly, there is a low chance of slashing for most networks.

In some cases, validators must manage a substantial amount of cryptocurrency as collateral for staking purposes. For example, an Ethereum validator may need to stake cryptocurrency worth $60,000 initially, which is far too much for many potential participants.

Potential Profits From Validator Nodes

Naturally, the main reason why anyone would want to start a node is the rewards. It’s important to check prospective networks’ rewards as they can vary depending on the network and validator performance. Factors influencing profitability include network parameters, the validator’s stake size, and the network’s commission fees. Most pooling platforms take a cut from validators’ earnings as well.

Since validators in a network share the earned rewards, more participants means lower individual rewards, potentially reducing your profitability over time. Generally, staking a large amount of coins increases the odds of being selected as a validator and earning more rewards (though this isn’t always the case). In some cases, validators stake their earned rewards, compounding their returns over time.

Setting up and running a validator is time-consuming and operating the validator nodes can be costly as well. However, the rewards earned from validation can make it worthwhile. Therefore, it’s important to weigh the benefits against the risks and overall costs.

Conclusion

Validators play a critical role in blockchain network security by preventing double-spending and Sybil attacks. They also maintain network integrity and decentralization, which what the crypto world is all about.

It’s essential to understand both the technical and economic aspects before committing to validating nodes. This is important because it could become risky if your operational, staking, and setup costs exceed the received rewards.

And finally, stay cautious of the risks like slashing and technical errors to reduce the chances of losses. Compare all the available options, evaluate them carefully, and research blockchain’s rules and requirements to select the best network to invest in (if validating is right for you at all).

FAQs

What does a blockchain validator do?

A blockchain validator is a participant who verifies and adds blocks to the blockchain, ensuring that transactions are legitimate.

Do blockchain validators make money?

Yes, blockchain validators can earn money from rewards provided by the blockchain network for transaction verification.

How do you validate a blockchain?

This depends on the protocols of different blockchain networks. Typically, consensus mechanisms and other cryptographic protocols are used to check and validate blockchain transactions.

How to become a validator?

Different blockchains have different requirements for adding validators to their networks. Research trusted blockchain platforms that have a demand for validators to take your first steps in becoming a validator.