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In the Substrate node template there are two folder node and runtime. When I am building the chain I guess runtime folder is utilized. I am wondering what is the purpose of the two folders?

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The node folder is where you configure the node also known as the client that is running your blockchain. If you look inside the folder: node/src, you will see that there are such things as configuring your chain specification, your node's cli commands and subcommands, your node's RPC and services. Where as the runtime folder pertains to all things runtime-related such as building your runtime logic.

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