Bitcoin Node Deployment

Bitcoin Node Deployment

Your own Bitcoin node is needed when you need independence from third parties. Public APIs (Blockstream, BlockCypher) are convenient, but: rate limits, downtime, inability to make certain RPC calls, privacy (all your addresses visible to provider). For a production payment acceptance system or custodial service — your own node is mandatory.

Hardware Requirements

SSD is mandatory — HDD makes initial block download 3–5x slower due to random reads during UTXO set verification.

Bitcoin Core Installation

# Ubuntu 22.04
wget https://bitcoincore.org/bin/bitcoin-core-27.0/bitcoin-27.0-x86_64-linux-gnu.tar.gz
# Always verify signature!
wget https://bitcoincore.org/bin/bitcoin-core-27.0/SHA256SUMS
wget https://bitcoincore.org/bin/bitcoin-core-27.0/SHA256SUMS.asc

gpg --recv-keys 152812300785C96444D3334D17565732E08E52E
gpg --verify SHA256SUMS.asc SHA256SUMS
sha256sum --check SHA256SUMS --ignore-missing

tar xzf bitcoin-27.0-x86_64-linux-gnu.tar.gz
sudo install -m 0755 -o root -g root -t /usr/local/bin bitcoin-27.0/bin/*

Configuration ~/.bitcoin/bitcoin.conf:

# Main
server=1
daemon=1
txindex=1          # Index all transactions (needed for lookupByTxId)

# RPC
rpcuser=bitcoinrpc
rpcpassword=STRONG_RANDOM_PASSWORD_HERE
rpcbind=127.0.0.1
rpcallowip=127.0.0.1

# ZMQ — for real-time notifications
zmqpubrawblock=tcp://127.0.0.1:28332
zmqpubrawtx=tcp://127.0.0.1:28333
zmqpubhashblock=tcp://127.0.0.1:28334

# Performance
dbcache=1000       # Cache for initial sync, MB
maxmempool=500     # Mempool size, MB

# For pruned mode (remove txindex):
# prune=10000      # Store 10 GB of blocks

txindex=1 — critical if you need to search transactions by hash. Without it — only current UTXO. Enabling retroactively requires full reindex (bitcoind -reindex).

Initial Block Download

IBD on mainnet takes 1–5 days on SSD depending on hardware. Acceleration:

# Run with increased cache for IBD
bitcoind -dbcache=4000 -daemon

# Monitor progress
bitcoin-cli getblockchaininfo | jq '.verificationprogress'
# 0.0 → 1.0 (100%)

# How much left
bitcoin-cli getnetworkinfo | jq '.connections'

ZMQ for Real-Time

Polling via RPC every few seconds is primitive. ZMQ gives push notifications:

import * as zmq from 'zeromq';

const blockSocket = new zmq.Subscriber();
const txSocket = new zmq.Subscriber();

blockSocket.connect('tcp://127.0.0.1:28334');
blockSocket.subscribe('hashblock');

txSocket.connect('tcp://127.0.0.1:28333');
txSocket.subscribe('rawtx');

// New block
for await (const [topic, message] of blockSocket) {
  const blockHash = message.toString('hex');
  console.log('New block:', blockHash);
  await processNewBlock(blockHash);
}

// New transaction in mempool
for await (const [topic, rawTx] of txSocket) {
  const tx = bitcoin.Transaction.fromBuffer(rawTx);
  await processPendingTransaction(tx);
}

Basic RPC Calls

import * as Client from 'bitcoin-core';

const client = new Client({
  host: '127.0.0.1',
  port: 8332,
  username: 'bitcoinrpc',
  password: process.env.BITCOIN_RPC_PASSWORD!,
});

// Transaction info
const tx = await client.getRawTransaction(txHash, true);

// UTXO info
const utxo = await client.getTxOut(txHash, outputIndex);

// Create new address (for HD wallet better use bitcoinjs-lib)
const address = await client.getNewAddress('payment_label', 'bech32');

// Current fee rate (sat/vB for next block)
const feeRate = await client.estimateSmartFee(1);
// feeRate.feerate in BTC/kB, convert to sat/vB:
const satPerVbyte = Math.ceil(feeRate.feerate * 100_000);

Security

RPC port (8332) never expose to outside. Access only via localhost or VPN:

# Firewall: close RPC from outside
ufw deny 8332
ufw allow 8333  # P2P port — must be open for sync

# Systemd unit for autostart
cat > /etc/systemd/system/bitcoind.service << EOF
[Unit]
Description=Bitcoin daemon
After=network.target

[Service]
User=bitcoin
ExecStart=/usr/local/bin/bitcoind -conf=/home/bitcoin/.bitcoin/bitcoin.conf
Restart=on-failure
TimeoutStartSec=infinity

[Install]
WantedBy=multi-user.target
EOF

systemctl enable bitcoind
systemctl start bitcoind

Separate system user bitcoin without sudo — standard practice. Wallet files in /home/bitcoin/.bitcoin/wallets/ with backup of seed.