Thanks to everyone who attended my first validator AMA. Most of the questions this time focused on how to become a validator. Here are the notes as transcribed by James Moreau.
My hope is this becomes one of a series of AMA's. Contact me here and I'll let know when the next one's happening.
Participants you'll see in the notes are -
Chris - Me, Chris Remus
Felix - Felix Lutsch
James - James Moreau
Mira - Mira Nugumanova
Question: What are the first things you’d encourage someone with no background in validating on POS networks to consider before getting started?
Chris: Do you have the skills or are you able to learn how to:
- Install and configure node software
- Be able to read and understand docs and improvise where docs are lacking
- Setup a VPS (virtual private server) or bare-metal server
- Secure it
- Eventually migrate key management to servers owned by you
The best of the best validators with professional setups have sentry nodes on the cloud and migrate some or all of their operations to secured data centers.
Cosmos is among the most complex system to validate in – it has a multi-tiered network architecture including sentry nodes (basically firewalls)There are trade-offs when it comes to cloud services like AWS or Google Cloud where you have convenience and price as benefits, especially with free credits, and security and centralization as a downside.
Question: How do I hop into an already existing network and compete with top validators?
Chris: Participating or becoming a top validator in networks like Cosmos can be difficult from a network reputation and staking amount standpoint. Breaking into the top 10 is not likely.With Livepeer adding validator rounds there was a lot of interest to get invovled because of rewards being famously high. As new validators came online there was a race to the bottom in terms of low commission/fees to attract people to stake with them.
Question: What kind of concerns do people have when considering who to delegate through?
Felix: People are really afraid of getting slashed. They want to know how well the server architectures of the validators are setup. How robust is the setup against failure and attack?
James: A big differentiation between validators is how professional their support is.
Question: Once operating, what are some big challenges validators are met with from a business and personal perspective?
Chris: Thinking about the business model is hard and sometimes you need to defer the idea of making a profit. Keeping nodes running, building more tools to make their jobs easier and communicating with their clients/customers/stakeholders is important. Also, fielding questions from newcomers who want to get involved with making money right away but have not done the work up front to figure it out on their own or have not contributed previously.
One idea is to have a shared model of responsibility and resources for marketing, community and support across a network of validators. A co-op model for marketing, community and support services.
Mira: Worrying about taxes and expenses is a big concern. Knowing the personal and business trade offs of selling cryptocurrency staking rewards as they come in to pay for expenses versus waiting. Fitment Labs may be working on something that will be made available to the public in terms of how to approach taxes.
Question: Closing Thoughts?
Chris: Get involved with new networks early as they emerge and try to contribute and build reputation there rather than jumping into the deep end with established, already running networks.
P.S. - My hope is this becomes one of a series of AMA's. Contact me here and I'll let know when the next one's happening.