Ask Yourself, Should I be Running a Stake Pool?

Staking & Delegation Setup a Stake Pool
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First, I’m extremely excited to be a part of this community and I hope to be a stake pool operator for the purpose of contributing to the decentralization of information and finance which a blockchain provides.

I mention the above to hopefully demonstrate that, like so many ‘newbies’ inspired to run a stake pool, I’m vested emotionally in the long-term for decentralization whether it’s Cardano or another project (…but I really think it’ll be Cardano given my 15-years of experience in startup tech companies with great marketing and funding initiatives).

So, Should I even be running a stake pool?

Personally, I studied Information Science which consisted of taking multiple computer science classes so, I’m not brand new but I’ve definitely needed to dust off some computer science skills.

After a few days, of following documentation and watching youtube videos (thank you everyone for your great content), I was able to register my pool without too much hassle and learned the following in the process:

  • This is fun!
  • With the right documentation and ‘how-to’, I’m able to comprehend the info, re-learn basic concepts, and troubleshoot important issues.
  • I’m capable of understanding the environment to handle future maintenance (given that sufficient information and documentation exists)

Now, I’ve finally reached a stalemate in regards to putting cold keys in cold storage…which has lead me to THESE THREE QUESTIONS:

  1. How am I suppose to extract cold keys when I’m operating a VM through Google Cloud Services? With good and detailed ‘how-to’ videos and instruction, I’m able to implement but I’m not going through the learning phase for this process without proper instructions because it’s so important to the security of my pledge and the stakepool.

Is there a way of doing it through my VM server (which is protected by private key and passphrase)? or do I need to install Linux on my local machine after wiping it clean?

  1. There has been talk about the proper stake pool set-up; for example: “it 's best to run 2-3 servers, 1-2 relays and then your block producing node”. If this is the case, should I even move forward with my 1 server containing my relay and node?

This seems more difficult then the talks of being able to run a stake pool on a VM or RasberryPi from home.

Again, I could be mistaken but I don’t think the tutorials lay out the setting up of 2-3 servers…and to clarify, I’m not against it however, if this is the proper set-up then I’d like to minimize margin of error and follow these instructions in detail (or am I completely out of my league and should STOP, which you can tell me below)

  1. If the best situation for me is to NOT run my own stake pool, is there a way of finding other stake pool operators in need of a co-owner that I could pledge my ADA too? I could help maintain…I’m a fast learner! lol (and I’m hoping this is a possibility without needing to give access to private keys)

Your comments are appreciated. I feel that my situation applies to a large portion of newbies looking to participate.

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Any Thoughts on creating a ‘Category’ on these forums for Stake Pool Operators looks for co-owners? I can definitely run a relay and/or node from my house or pick up the tab on a VM.

or should I give up and stake my ADA in Yoroi like everyone else? :frowning:

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Lol I feel totally the same! I really enjoy learning all this stuff, although it’s very complicated for a beginner…
Of course, all the linux pros do fancy things to make their pools as good as possible, but I do think its less complicated than we think.
I would recommend you to try it. Maybe with a small pledge and see how its running. Lateron you can still make a second pool when you got the skills.

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You will want an airgapped machine dedicated to key management. How you store keys off that machine is up to you. I recommend using the airgapped machine to create all your keys, and also to sign and build all transactions. Do not place secret/private keys on a 3rd-party vm, and never put them on an internet-connected machine. You can move the signed transaction files from your airgapped box to a hot node for submission to the chain.

I recommend definitely using a multi-server / vm approach. I operate 5 relay nodes in front of each core for connectivity and redundancy, but you can get away with 2 relays for each core node.

You might be able to partner with an operator on pledge, but pledge effect is currently so minimal it’s mostly used for marketing. I personally wouldn’t be interested in paying a partner that isn’t bringing value beyond what I see as a gimmick (pledge currently has very little impact on rewards). Once the a0 and k parameters increase, this story will certainly change (more operator partnership opportunities will emerge as pledge will have noticeable impact on rewards). Do not give any operator partner access to your private payment address keys - but you can give them stake keys without compromising your funds.

If you decide to not run a pool, you could always delegate to support operators bringing value to the Cardano ecosystem. There are a lot of smaller, yet highly talented, stake pool operators that could use a good delegator to help them jumpstart their pools.

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Thanks ADAFrog & Sim!

I apologize for the newbie question… getting stake pool keys onto an airgapped machine is the priority…I’m just trying to understand how it works to make it easier to understand the implementation.

I’m assuming that I’ll need to 1) get a residential server and install the core node; then 2) remove all internet access to this server while extracting cold keys 3) move cold keys to an airgapped machine prior to re-establishing internet connection again…is this right?

Is there ever a situation where you have 2 relays, and your Core Node running on VM while being able to extract cold keys (stake pool keys) from a completely separate airgapped machine from my house?

(Note: just to confirm, all computers used for setup is hard-wired to router…no Wifi)

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Oh, and thanks for the clarification on "Once the a0 and k parameters increase, this story will certainly change ". I guess it doesn’t hurt to stay ahead of the trend but it sounds like I have time.

Please see my note below…again, much appreciated.

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You want to install the cardano-node on an airgapped machine using precompiled binaries. You don’t need to run the node to generate keys using cardano-cli functions.

I would avoid putting keys on a machine that has ever been on the internet, and definitely not a machine that will ever touch the internet again. Once your keys are generated you will want to store them properly.

In most cases, hot (internet-connected) devices cannot access cold devices. It is possible for malware to transfer from an online machine to an offline machine, and you should do some research here.

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“You want to install the cardano-node on an airgapped machine using precompiled binaries.”

What does this mean Mr ADAFrog?

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I mean, what do you mean exactly with precompiled binaries?

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you can compile cardano-node on a hot machine, and then move the compiled binaries over to your cold airgapped machine

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Okay I think i got it: the binary files are the ones that are in your /bin directory. So download cardano-cli & cardano-node file from your servers /bin directory and transfer it via USB to your airgapped maschine and put them also in tge /bin directory…
Then you are able to do the cardano-cli commands on your airgapped machine.

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Yes, that’s correct!

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I would like to see one of the experienced pool operators create a list of hardware and software with names and brands and details that someone needs to run a proper Stake Pool with the approximate total cost to do it…
This information would help people decide if they want to start the process.

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I started thinking about running a stake pool, but I didn’t get around to setting one up because I’m a linux hobbyist, not an expert, but I’ve been in the crypto space since early 2014, and was too busy with other things. This is what I want to do full time and have been investing in cryptos since closing my business in early 2018 to work on crypto investing full time; however, I feel like I should take the “Cardano” approach, and not rush into creating a stakepool and suffer loss of delegates or worse because of it. I don’t have a real server yet, just a laptop which I’ve practiced on setting up a node, at least partially. I just started trying to set up a server four days ago. I really want to get this right in every aspect before running a pool, so there’s lots of research to be done - maybe even wait a little bit to see how the ranking algorithm values SPOs. It depends on uptime, low latency (this we know already), but pool ranking suggest those with the most live stake amount produce the most blocks - it makes sense mathematically, but a lot of top pool operators have a personal relationship with their stakers via some form of media, like youtube, twitter, etc. Maybe it’s too much for one person to handle, so if I find myself in that position at some point in the future, I might be on the lookout for a co-owners/partners as well. Branding is very important with the top pool operators it seems. This is not a ‘plug and play’ business. It seems like the best pools will be brands that you have to build over time that offer good services, good value, and have some kind of ‘branding’ via ‘advertising’ like on internet media or word of mouth etc., like any other successful business.

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Same here. I love Cardano project and would like to support it in one way or another. Eventually I might run a stake pool on mainnet, but I’m not sure if I should or can. I don’t think I have enough time to learn enough and do everything properly.

I’m a programmer, have a couple of Rock PIs, fast internet connection available and experience from ITN (I was winning surprisingly a lot of battles). I like the idea of small decentralized pools running on a physical HW with transparent management and runtime data, great security and proper backups (node/internet/power).

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As you know the kes keys are regenerated every 90 days. As a precaution can the cold keys be regenerated (to replace coldkeys) without loosing access to the node? Current cold keys are not lost or compromised, I just would like to know my options for renewing coldkeys in the future if I wanted to or needed to. Thanks in advance

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No.

If you lose your cold keys you lose your pool

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Thanks Frog… I need to clarify, my keys are not lost… so when you say “no” are you saying as a best practice no, or that cold-keys cannot be re-generated at all? I cannot regen and swap em out?

Logically it seems doable, in fact easy. Im just uncertain how the piping and plumbing would be effected. Thanks again.

And as always, cheers and beers!

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You cold keys are basically your pool ID and all the delegates link to this pool ID. If you re-generate a new pair of cold keys, the pool ID will be different and you will loose all previous delegation.

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Thank you!

And as always, cheers and beers!