Can you earn money by running a node? How to choose a public chain? We talked to a node operator about it.We spoke to a node operator about earning money by running a node and selecting a public chain.
From the earliest Bitcoin, to Litecoin, and early Ethereum, the hardware mining (hashrate) was based on the PoW consensus mechanism, which also made miners the most “upstream” role for obtaining tokens.
In 2011, QuantumMechanic first proposed Proof of Stake (PoS) on the Bitcointalk forum, which replaced the weight of computing power with the amount of holdings, attracting the attention of many early participants. Subsequently, different public chain teams successively developed various PoS mechanisms such as PoW+PoS hybrid consensus mechanism, DPoS, BFT+PoS, and gradually evolved into well-known projects such as ETH 2.0, Cosmos, Solana, Sui, Aptos, etc. Some public chain infrastructure builders have gradually shifted from PoW mining to node operators based on PoS.
A more popular explanation for node operators is workers responsible for maintaining the integrity and correctness of blockchain ledger records. It is equivalent to the development team creating the birth of a new public chain, and later node operators need to maintain it.
Whether it is a miner or a node operator, they both maintain the smooth generation of blocks of the network as public chain infrastructure service providers, and also receive stable “coin-based” income.
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The specific job content and process of node operators are often covered by a layer of mysterious veil, and my personal understanding of people engaged in node service providers is relatively limited. In the current market environment, do newcomers still have the opportunity to participate in node operations? Which chain’s income/cost ratio is more attractive? What are the risks of participation? With these questions, Odaily Star Daily and MJ, a node service provider who has been in the industry for many years, conducted a discussion on the above issues, and the content is organized as follows:
Odaily Star Daily: What abilities do you think are necessary to be a node service provider?
MJ: First of all, your investment philosophy should be mainly based on long-term value investment, and short-term fluctuations should not affect your judgment. Secondly, you need to constantly improve your own knowledge of public chains, understand the consensus mechanism of public chains, and the technical updates of the target public chain (especially new public chains). Finally, if you have technical capabilities, it is best, if not, try to cooperate with people who have technical capabilities.
Odaily Star Daily: What hardware and costs are required to set up a node?
MJ: Different projects have different requirements. Generally, detailed configuration requirements can be found on each project’s official website. I can briefly describe the costs and requirements of some well-known projects.
1. Bitcoin: professional mining machines are used, with a minimum starting cost of 100,000 USD. It is suitable for institutions to operate.
2. The entry threshold for Ethereum is relatively easy. If you build your own node, the minimum pledge is 32 ETH. You can also use Lido and other options, which have lower thresholds. Corresponding income will also decrease.
3. Solana and Avalanche have high hardware requirements, with monthly bandwidth costs exceeding 10,000 USD.
4. The hardware cost of Sui and Aptos is high, and the number of nodes is relatively small, with a construction cost of around 10,000-50,000 CNY.
5. The threshold for the new public chain (TFSC) we are participating in the development network phase is relatively low. An 8-core 16 G, 16 G memory, 500 G hard disk, and 50 M upstream and downstream bandwidth are required, with a construction cost of between 150-200 USD.
Odaily Star Daily: From what I understand, you have experienced node deployment on multiple public chains. What are the key considerations for you when choosing a target public chain?
MJ: Obviously, the core point of attention is income, but income is result-oriented, and the level of income depends on your judgment of the project. I have the following considerations:
1. I think it is permissionless, referring to the low entry and exit threshold of node deployment.
2. The token should have a wide audience, and the unit price should be as low as possible, which helps to increase the number of participants, such as meme coin.
3. The project team’s support for the ecology, such as incentives for DeFi, GameFi, cross-chain, etc. through the foundation.
4. Whether the bottom-layer technology of the public chain is innovative and how to optimize TPS and gas fees, which is beneficial to the subsequent development of the ecology.
5. It is better to be compatible with EVM, which is beneficial to the influx of developers.
Finally, income depends on the ability to recognize the project when obtaining new coins, or the scale effect of having large funds when selling.
Odaily Star Daily: As a node service provider, are there any other income enhancement items besides obtaining income by packaging blocks?
MJ: Currently, most mainstream public chains adopt PoS. In addition to the income brought by the daily work of the nodes, there are also mechanisms such as token issuance dividends, test airdrops, and delegate income (for individuals who don’t have operational capabilities as an agent) for some new public chains.
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