The Good Tech Companies - Step-by-Step Guide: How to Be a Blockchain Validator (and Earn Rewards From It)

Episode Date: September 19, 2024

This story was originally published on HackerNoon at: https://hackernoon.com/step-by-step-guide-how-to-be-a-blockchain-validator-and-earn-rewards-from-it. Aspiring to be a blockchain validator? Learn the process and earn rewards for securing the network, as shared by aelf, layer 1 AI blockchain. Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #blockchain-validation, #ai-blockchain, #node-operations-on-blockchain, #staking, #staking-rewards, #what-is-blockchain-validation, #node-operators, #good-company, and more. This story was written by: @aelfblockchain. Learn more about this writer by checking @aelfblockchain's about page, and for more stories, please visit hackernoon.com. Aspiring to be a blockchain validator? Learn the process and earn rewards for securing the network, as shared by aelf, layer 1 AI blockchain.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. Step-by-step guide. How to be a blockchain validator and earn rewards from it, by IELF. What does a blockchain validator do? A blockchain validator is responsible for verifying and adding new blocks to the blockchain. They play a critical role in ensuring the accuracy and immutability of the data stored on the network. Validators are often incentivized through rewards in the form of cryptocurrency for their participation. This not only helps to secure the network but also provides an opportunity for individuals to earn passive income. What's the difference between validators and node operators? A node operator maintains a full copy of the blockchain and participates in the network by

relaying transactions and blocks. A validator, on the other hand, has the additional responsibility of actively participating in the consensus mechanism to verify and add new blocks. A validator's role may look different depending on the consensus mechanism that the blockchain in question operates on. Consensus mechanisms are rules that govern how new blocks are validated and added to the blockchain. Popular consensus mechanisms include proof-of-work, POW, and proof-of-state, POS. Simply put, all validators are node operators, but not all node operators are revalidators. Validators have a more critical role in securing the blockchain on DARE often subjected to selection criteria. Step 1. How to choose the right blockchain. The first step in your validator

journey is to select a blockchain network that aligns with your interests and resources. Several popular blockchains offer validator programs, each with its unique characteristics. Ethereum. One of the largest and most well-established blockchains, Ethereum uses a proof-of-stake consensus mechanism. It requires a minimum stake of 32 ETH to become a validator. It boasts more than 1 million active validators globally, on both a retail and institutional level. Backslash.Cardana. Cardana is known for its focus on peer-reviewed research and development. It operates on a proof-of-stake variant called Ouroboros, and the staking requirements are relatively lower compared to Ethereum. Backslash.

Solana Solana boasts high transaction speeds and low fees. It employs a unique proof-of-history consensus mechanism combined with proof-of-stake. The staking requirements vary depending on the validator's performance. When choosing a blockchain, consider factors like the consensus mechanism, staking requirements, reward structure, community support, and your technical expertise. Tip Pushpin Potential APY for Staking While the exact APY can fluctuate, here's a row estimate of what aspiring validators could potentially earn on some popular blockchains as of the time of writing ethereum 2.0 approximately four to six percent apy with the potential for

higher returns through mev boost backslash dot cardona approximately three to five percent apy depending on the chosen stake pool and network parameters. Backslash dot Solana. Approximately 6-8% APY, with variations based on validator performance and commission fees. Step 2. Meet the technical requirements. Once you have selected a blockchain, these are some common technical requirements to meet in order to run a validator node. Hardware. You will need a reliable computer with sufficient processing power, memory, and storage. The specific requirements vary depending on the blockchain, but a general guideline is a modern CPU with at least four cores, 8GB of RAM, and a fast SSD with ample storage space. Backslash. Software. You will need to install the blockchain's client software, a compatible wallet, and any additional monitoring or management tools.

Follow the official documentation for your chosen blockchain to ensure proper installation and configuration. Network A stable internet connection with sufficient bandwidth is crucial for uninterrupted node operation. Consider a dedicated internet connection or a high-quality residential connection with low latency. Step 3. Set up your validator node. Now that you have the necessary hardware and software, it's time to set up your validator node. Install and configure blockchain client. Download and install the official client software for your chosen blockchain. Follow the provided instructions to configure

the node and connect it to the network. Backslash dot. Create and secure a validator wallet. Create a new wallet specifically for your validator operations. Ensure it is adequately secured with strong passwords and two-factor authentication. Back up your wallet seed phrase in a safe and secure location. Backslash dot, stake crypto. Acquire the required amount of cryptocurrency for staking on your chosen blockchain. Transfer the funds to your validator wallet and initiate the staking process. You might need to join a validator pool or delegate your stake to an existing validator. Step 4. Maintain and secure your node.

Once your node is up and running, it's essential to maintain and secure it to ensure uninterrupted operation. Regular maintenance and updates. Keep your node software up to date with the latest releases and security patches. Regularly monitor your node's performance and address any issues promptly. Backslash dot security best practices. Implement robust security measures to protect your node from potential threats. Once again, the importance of strong passwords and two-factor authentication can't be stressed enough, and consider running your node on a dedicated server or virtual private server, VPS. Backslash dot, slashing. Slashing is a penalty mechanism in some POS blockchains where a portion of a validator's stake is confiscated for malicious behavior or

downtime. Adhere to the network rules and maintain high uptime to avoid slashing. Step 5. Participate in the consensus process As a validator, your primary responsibility is to participate in the consensus process and help validate new blocks. Validation process. The specific validation process varies depending on the blockchain's consensus mechanism. In proof of stake, validators are typically chosen randomly to propose and validate new blocks based on their stake and reputation. Backslash dot. Active participation. Actively participate in the network by proposing and validating blocks.

Maintain high uptime and respond promptly to network requests to avoid penalties. Backslash dot. Reputation. Build a good reputation by consistently participating in the network and adhering to the rules. A good reputation can lead to increased opportunities for validation and higher rewards. Step 6. Earn rewards, manage your stake. Validators are rewarded for their contributions to the network. Some blockchain networks have minimum staking requirements for validators to ensure vested interest in the network's performance and security. Be sure to check your choice of blockchain network for the minimum staking amount. Reward mechanisms. The reward structure varies across different blockchains. In POS, validators typically earn rewards for proposing and validating blocks,

as well as for participating in the network's governance. Backslash dot. Manage stake. Monitor your staked cryptocurrency and adjust your stake as needed. Consider compounding your rewards to increase your stake and potential earnings over time. Backslash dot, risks and considerations. Staking involves locking up your cryptocurrency for a certain period. Be aware of the potential risks, such as slashing or market volatility, and make informed decisions based on your risk tolerance. Tip money bag other ways to earn rewards as a validator. Besides validating blocks and staking, validators can get more rewards through the following means 1. Block proposals. In certain blockchains, validators have the opportunity to propose new blocks to be added to the chain.

This is usually a competitive process, and successful block proposals can lead to significant rewards. Backslash. 2. Sync Committees. In some POS blockchains, like Ethereum 2.0, validators can participate in sync committees. These committees are responsible for periodically signing attestations that help to finalize blocks and ensure the network's security. Participation in sync committees often comes with additional rewards. 3. MEVs, minor extractable value. MEVs refer to the additional value that validators or miners can extract from block production beyond the standard block rewards. This can include optimizing transaction ordering, capturing arbitrage opportunities, or participating in liquidations. However,

MEV extraction can be complex and requires specialized knowledge and tools. Backslash. For others, depending on the specific blockchain, there might be other opportunities for validators to earn rewards. These could include providing data storage or Oracle services or contributing to the development of the network. Impact of AI on blockchain validation. The integration of artificial intelligence, AI, into blockchain technology has already brought about numerous benefits enhanced security and fraud detection. AI algorithms can analyze vast amounts of data to identify patterns and anomalies that might indicate malicious activity or fraud attempts.

This proactive approach can significantly enhance the security of the blockchain network. Backslash dot, Improved efficiency and automation. AI can automate various tasks involved in the validation process, such as node monitoring, data analysis, and resource allocation. This can lead to increased efficiency, reduced operational costs, and improved overall performance. Backslash dot, optimized resource allocation and energy consumption. AI can help optimize the allocation of computing resources and energy consumption, leading to a more sustainable and environmentally friendly blockchain network. IELF, a layer 1 AI blockchain, offers a high-powered platform for the building

and running of decentralized applications. Based on its AED POS consensus mechanism, which is designed to provide high throughput, scalability, and network security, IELF encompasses what's been mentioned in the intersection between AI and blockchain validation. There is intelligent load balancing, tone-sure efficient traffic distribution and resource allocation, and an AI oracle line the pipeline to enhance AI smart contracts' ability to accurately extract real-time data from external sources. Will AI abolish the need for validators? As much as AI can enhance blockchain operations as outlined above, for the foreseeable future, it would be a tall task to replace human participation in the

validation process. It is essential for maintaining the core principles of decentralization, trust, and security that underpin blockchain technology. Consensus concerns. The consensus mechanism is the heart of a blockchain, ensuring that all nodes agree on the state of the network. AI might be able to optimize certain aspects of consensus, but the fundamental need for multiple validators to reach an agreement remains. Backslash dot. Potential biases in AI algorithms. AI algorithms are trained on data, and if the data is biased, it can lead to biased outcomes. It's essential to address potential biases in AI models to ensure fairness and avoid discriminatory practices. Backslash dot. Trust and security. AI can be helpful in identifying patterns and

potential threats, but it's not infallible. Validators and their stake in the network provide a financial incentive for honest behavior, acting as a deterrent against malicious actions. Backslash dot. Ongoing human oversight and governance. While AI can automate many tasks, it's crucial to maintain human oversight and governance to ensure accountability and prevent unintended consequences. In closing, becoming a blockchain validator is an exciting opportunity to participate in the growth and security of the blockchain ecosystem. Not to mention, it opens up more forms of earning beyond just crypto trading. Other than following this step-by-step guide, the onus is on you to stay

updated and engage with the community of your preferred blockchain. Networks and protocols go through upgrades and changes frequently, and given the sometimes tumultuous nature of staking, you wouldn't want your staking commitments and potential rewards to go unvalidated. Info disclaimer. The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. IELF makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult with a qualified financial or legal advisor before

making any investment decisions. About IELF, IELF, an AI-enhanced layer 1 blockchain network, leverages the robust C-sharp programming language for efficiency and scalability across its sophisticated multi-layered architecture. Founded in 2017 with its global hub in Singapore, IELF is a pioneer in the industry, leading Asia in evolving blockchain with state-of-the-art AI integration and modular Layer 2 ZK roll-up technology, ensuring an efficient, low-cost, and highly secure platform that is both developer and end-user friendly. Aligned with its progressive vision, IELF is committed to fostering innovation within its ecosystem and advancing Web3 and AI technology

adoption. For more information about IELF, please refer to our white paper v2.0. Stay connected with our community. Website, X, Telegram, Discord Thank you for listening to this Hackernoon story, read by Artificial Intelligence. Visit hackernoon.com to read, write, learn and publish.