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There are Bitcoin wallets like "Sparrow" which use a central service for maintaining the Blockchain, so I don't have to download 400GB to start using Bitcoin.

Now, why should I use Bitcoin Core (full node software) instead of a Bitcoin wallet software like "Sparrow" which is using a centralized server, which the software is able to contact to ask for my balance?

There is also other software like "Electrum" which only differs in the way that Electrum uses several servers and not only one, and it's running simplified verification.

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  • There might be an incentive for some node operator to front-run your transaction or increase your fee really high if they are a mining pool node or something like that. Although this is not usually the case it is important to be able to avoid such a circumstance. Also it prevents a chain of ipaddress and bitcoin address from being made by some 3rd party. Running a node can theoretically still be tracked that way but atleast you will be able to better manage the addresses and increase your own privacy that way. Some nodes might even deny a transaction for no good reason. Which is inconvenient.
    – Poseidon
    Feb 24, 2023 at 22:43

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According to Sparrow

The following sections describe 3 common stages in a Bitcoiners journey.
[...]
consider that you are sharing your balance and location via your IP address.

If this thought makes you uncomfortable, it’s time to consider running a Bitcoin Core node

According to the creator of Bitcoin:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending.

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Because running a full node grants you security and privacy.

The former because you do full verification of the chain, and the latter because you don't hand over all of your addresses to some stranger.

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