I'm developing a 2D HTML5 Canvas Game, and I am trying to think of the most efficient way to implement a Physics Loop on the server-end of things, running NodeJS and Socket.IO.

The only method I've thought of is using setTimeout/Interval, is there any better way? Any examples would be appreciated.

EDIT: The Game is a top-down Game, like Zelda and older Pokemon Games. Most of the physics done in the loop will be simple intersects.