A Beginner's Guide To Setting Up A DASH Staking Rig
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Have you ever dreamed of having a money printing machine that cranks out money in your home? Maybe your bedroom or basement dwelling area you have a machine that spits out currency 24/7.
I certainly do not mean anything illegal and I am not talking about counterfeiting fiat paper currency. Let me provide some background to this discovered hack with a story followed by how this system blueprint works.
Background DASH - a Bitcoin Fork
Once upon a time Bitcoin forked a development of a coin we currently call DASH. A great privacy coin but a feature opposed to PoW proof of work mining like its father Bitcoin.
Basically speaking PoS proof of stake mints coins utilizing algorithms without the burden of heavy processing power. PoS gave birth to a new way of minting coins without having to invest large amounts of money to keep up with GPU and computer processors. An important lineage was eventually born on the PoS cryptosphere namely DASH.
Eventually another forked coin was born out of DASH called PIVX (private instant verified transaction) with a remarkable technological crypto also featuring increased privacy, low transaction fees and fast transfer speeds.
The Birth of PoS Masternode Cryptocurrencies
We now have many altcoins in the crypto landscape which mainly stems from these earlier grandparent cryptocurrencies DASH and PIVX. From the time I write this, we are over 300 PoS altcoins currently which can be monitored at Masternodes.online
among other Masternode monitoring websites.
DASH is deserving of the mass dominance equating to well over 50% of all the PoS masternode staking cryptocurrencies because they are the first. From the list of Masternode PoS cryptocurrencies is where we primarily select our cryptos for our digital money printing machine.
The current community of Masternode stakers represents a smaller segment of the crypto community online but steadily growing because of the ease in which we can setup and earn cryptocurrencies with a lower barrier to entry.
Choosing Your Cryptocurrencies for Staking
I do not want to shill for any such specific coin so I will be as unbiased and transparent as I can. I merely want to provide a high level blueprint of how the system works. In my personal opinion I would choose at least two cryptocurrencies for your digital money printing machine.
The current cryptocurrencies I have chosen to stake personally are ColossusXT
for various reasons meant for another article although you have a countless selection of other fine PoS cryptocurrencies to choose from.
One crypto should be deflationary thus having a limited supply example similar to Bitcoin which will mine a finite limit no more than 21 million BTC Bitcoins. The reason why I believe in selecting one deflationary cryptocurrency is to offset the vary inflationary monetary climate that we currently live in today.
Massive money printing at a high rate by central banks is the root cause to inflated prices of goods and services. Inflation plays into our hands because it partially benefits the valuations of deflationary currencies with a limited supply.
The other cryptocurrency can be that of something revolutionary in the cryptosphere. There are currently many of these projects in the pipe up and coming and you have a vast choice to choose from.
The coins you select should also have an active and supportive community alongside a solid development team so you can stay posted on updates, current news and answering of important questions.
Prepare to stay engaged with Discord being a standard community communication platform paired with Telegram. Both platforms appear to be the standard norm of communication at the time of writing this article.
Setting Up Your Wallets to Store your Coins
From the homepage of your desired coins you will find both exchanges to purchase your cryptocurrencies and a download section for your crypto wallets.
I advise you setup your wallets on a Raspberry Pi. In most cases, you will require a standard 2 gigabytes of RAM memory on a single core processor. There are many vendors online for purchasing your Raspberry Pi computers at a very low cost.
You will host one cryptocurrency per Raspberry Pi computer. I prefer to use the Pi because you can run your crypto wallet on a Linux operating system which happens to be superior to Windows OS for security alongside the Pi energy efficiency which is far better than that of a PC or laptop.
Hosting Your Masternodes - Where and Why?
The mechanism to minting cryptocurrency with a PoS proof of work model is algorithmic as apposed to processing power. We are deviating away from the Bitcoin PoW minting model for cost efficiency and ease.
Do you have the money in running a profitable PoW cryptocurrency mining rig? I certainly do not so you may find PoS mining to be a more viable option.
You can either host your Masternode for staking on a home computer, rent a VPS (virtual private server) or utilize a service online specializing in running Masternodes.
I have chosen the ladder of utilizing a Masternode hosting service because running a Masternode on a home device gives away your IP address as I assume privacy may be a concern. Also you ideally want the hosting server to have a dedicated computer with 24/7 consistent access to the Internet with high bandwidth. Renting a server such as a VPS or Masternode hosting service is currently the best options. If you are curious I use Pecunia Platform
(incl. my referral link).
Masternode Architecture - Security
You may be wondering about security of your cryptocurrency staking system. Are your digital coins safe? Can they be stolen or hacked? Running a Masternode requires two distinct wallets.
One wallet runs the algorithm that stakes your minted coins, the other wallet is where you store your required locked crypto balances which also receives your staked quantities.
As you can imagine this is precisely where you host your home crypto wallet residing on your Raspberry Pi computer. Your coins will remain safe and secure on your home device.
Even if the Masternode hosting service or rented VPS wallet goes down your digital coins remain safe and secure on your home digital wallet at all times. You also must practice the following strict rules.
- Do not ever grant your wallet private keys or grant virtual access to your home digital wallets for any reason.
- Do not use your home digital wallet computers for surfing or browsing the Internet. The wallet must be dedicated and strictly used as your "digital money printing machine".
- Make frequent backups of your digital wallets and store the wallet file safely in secure places ie. USB thumb drives or disk always offline.
- Don't invite strangers over to your home and show them your digital wallets and provide tutorials on how to withdraw the coins... :) sorry I had to add that for self humor.
Running your home digital wallets have two primary functions:
- Used as a receiving wallet for your newly staked Masternode coins.
- Secondary staking from your earned staking balance.
There are typically two distinct levels of earning coins with PoS cryptocurrencies, Masternode and staking. Mastenodes require a designated balance which must be locked and sustained.
You earn the highest minted quantities as a Masternode because your coins are locked thus being rewarded the most. Having a smaller balance also earns minted coins at a lower rate for general staking.
To take advantage of maximum earnings you should utilize a Masternode and continue to stake your incoming coin balance. You must keep your home wallets committed and connected to the Internet 24/7 to maximize the number of coins you receive.
The ideal earning model is to stake your digital coins until you hit Masternode level quantities and continue building more nodes to multiply earnings.
What to do with all these staked coins?
Personally I advise staking until you observe a profitable period in the market to swap or sell over to BTC. Once you feel your coins are profitable enough to spend you can sell them on an exchange for Bitcoin and spend.
I would not even consider doing this until we hit another strong bull market so stake and earn away passively. The longer we wait until the next crypto bull market the more digital coins we will have to sell. IMHO, if the crypto projects you are committed to continue to advance and evolve why even sell? We are headed towards a singularity in blockchain technology which I will touch upon near the end of this article.
Advice and Tips
There have been many scam coins in the past where the team has managed to swindle investors out their hard earned money including BTC and disappear to simply dump all their project coins on an exchange and take off.
I am sure these scams will continue now and into the future. It is very important that when you commit to a chosen cryptocurrency to invest that you do your research and ask many questions. A pragmatic approach would be to join the community boards on both their Discord and Telegram.
If you observe many thousands of Telegram followers run for the hills. Telegram followers can be purchased and faked very easily as there are many marketing groups that offer the service. Read their whitepapers thoroughly and ask yourself if the concepts are realistic.
Upkeep of online wallets and blockchains require a committed team. Most of these PoS cryptocurrencies are forks of either DASH or PIVX. A dedicated team with a dedicated blockchain engineer is extremely important for troubleshooting, updates and upkeep. Ask questions and stay informed. If you feel your team is shady simply pack up, liquidate and move on to the next cryptocurrency.
PoS altcoins are not all scams. Some certainly have been but there are some fantastic projects out there that offer traits superior to Bitcoin that offer better privacy, faster transaction times including staking rewards. You simply need to find them.
Some say and think the altcoin market is dead because crypto exchanges they are traded on are shady, may have experienced a hack or force scammy KYC (know your client) registrations.
Crypto exchange volumes have dropped significantly since KYC implementation including exchange hacks but let me let you in on a little secret.
There is a singularity in blockchain cryptocurrencies that have been in development for some time. A singularity that is truly decentralized offering atomic swaps in DEX, but I will save this for another article.
Internet money will continue to gain adoption. Even after the most recent bear market and crypto-winter in cryptocurrency we still experience solid growth in fundamentals. Crypto and blockchain technology will become a more integral part of our lives and nothing can stop it. Thanks for reading.
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