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Helium’s meteoric rise in early 2021 can be largely attributed to HIP-25. When this proposal was approved back on January 29th with the stated sum of 10,000 HNT being required to run a validator, people rushed to buy more Helium on Binance.
In the months since then, one could argue that Helium has become a mainstream cryptocurrency. I don’t care to speculate on every price movement, but you can bet that a massive amount of upward pressure in February and March came from people with 1,000-9,999 HNT panic buying in order to reach that 10,000 HNT threshold.
The introductory blog post was published on February 11th.
Why are Validators so Eagerly Anticipated? Why the Requirement of 10,000 HNT?
Validators will help distribute the network. Running a validator helps verify transactions and add new blocks to the blockchain. People are excited because there exists an estimated reward curve with eye-popping ROI.
This projected ROI is incredible. Some have pointed out that the return gets less exciting as we approach the 10,000,000 HNT staked mark. Sure, that’s true, but having that much staked anytime soon is preposterous. There are only about 82,000,000 HNT circulating today. Expecting more than 10% of the supply to be neatly portioned and then locked up is just silly. Point being: if you can get the 10,000 HNT together, running a validator makes a lot of sense.
The 10,000 amount is configurable via a chain variable (see FAQ). It’s likely that, at the time of proposal, this number made sense as it would require a non-trivial commitment from the person running the validator, even at $1 per coin.
What’s the Best Way to Obtain 10,000 HNT Today?
If you’re looking to run a production validator, your best bet is to simply buy the tokens. Mining 10,000 Helium would take a very long time especially seeing as there is a halving occurring soon. Depending on your location and how many hotspots you own, it could take years. I obtained most of my tokens on Binance.us. I think this is your best bet whether you’re trying to accumulate a specific number or just speculate on price movements.
The current exchange rate between 1 HNT and USD is about $17.5. That means that 10,000 HNT, if purchased right now, would cost in upwards of $175,000. That’s a huge investment! If you still want to get involved at a large scale and are comfortable spending, say, $20,000, I think it’s viable to order a large number of hotspots. Placed correctly and with the right management, these can be your personal money printers. Ideally, a fleet of hotspots could earn you thousands upon thousands of HNT. My RAK hotspots were purchased from Cal-Chip.
You can use my referral code “TIMO” for 3% off your purchase!
Okay, How Do I Set Up a Validator?
Currently, validators are still on testnet. This means that you can’t stake your tokens or obtain real rewards. It also means that if you want to gain confidence in setting things up without feeling like you’re missing out on the aforementioned crazy ROI, now might be a good time to get your feet wet.
The guide is thorough and complete. I had my testnet validator up and running with all recommended settings in about 15 minutes.
The setup can be daunting if you are not experienced with AWS or working from the command line. While these things can be learned, my advice is to not blindly copy and paste code from 3rd-party websites. This is a growing risk in crypto communities. Please don’t install random stuff that strangers are recommending on forums or on Discord. It is incredibly easy to get a novice to install something malicious without realizing it.
With enough practice, I believe anybody should be able to get to the point where they can run the commands in the guide and have a functional validator. That said, it’s a lot of money to put at risk if you manage things wrong, whether you struggle to keep the software up-to-date or don’t understand how to properly secure your credentials.
If you have your 10,000 HNT and are ready to stake, I highly recommend finding a trustworthy tech-savvy friend to partner with. If you can’t find someone, you can ask me. Some people have messaged me offering to pay for Helium help, so I suppose I’d be comfortable offering this type of service.
Other Tips to Simplify Setup
Install Helium CLI Wallet
The installation steps are left unclear and might not be easily understood by a novice. Once you make it to the README file in the Github repository, here’s what you’ll see:
Download the latest binary for your platform here from Releases. Unpack the zip file and place the
helium-walletbinary in your
To complete these instructions, you download whatever package matches your operating system from this page. Then, you unzip it. Then, from the command line, you want to check your
$PATH by running
echo $PATH. You’ll see folders such as /usr/local/bin if you’re on MacOS. Copy the helium-wallet file to one of those locations. You’ll then be able to run it simply using the
Set up the AWS Instance
This part is glossed over a bit, too. Don’t worry about any of those other cloud providers with funny names. Head straight to https://aws.amazon.com/. From there, you can create an account.
Once you’re in, navigate to EC2. Then click “Launch Instance.” When it comes time to select your AMI, you want to use Ubuntu. For example:
Next, instance type. To meet the requirements of the software, it’s recommended to run at least a t2.large instance.
On Step 4, you want to add at least 64GB of storage for testnet.
Next, you must expose port 2154 for port forwarding:
Finally, create your instance! Once you do that, you’ll want to connect via SSH using your key. You can find your public IPv4 address in the instance info window in EC2. The command to access your instance from your laptop may be
ssh -i ~/Downloads/my-helium-key.pem firstname.lastname@example.org. The IP address and your key name/path may vary.
Can’t I Just Run it on a Home Computer?
No. At worst, it’ll be a non-functioning mess. At best, you’ll accrue plenty of penalties.
What Are The Costs of Running a Validator?
A recommended AWS t2a.large instance costs roughly $67 per month to run. With a few other requirements such as storage, data transfer, and an elastic IP, this might be closer to $75 per month. Be aware that there are many ways to get AWS credits or to get longer-term contracts that provide better deals.
What About These Staking Pools?
Wherever there’s staking, there are going to be staking pools. The premise of a pool is that another operator will build a system that “pools” multiple users’ tokens and then distributes the rewards. The pool operator will skim some fee off the top as compensation for providing the service.
First of all, pools can defeat the purpose of decentralization. If there’s a really popular pool, and that pool owner literally pulls the plug, a major part of the network would drop out. At that point, we might as well just have centralized staking. The whole point is to distribute the resources and points of failure without providing explicit requirements regarding how to do that.
Can you get scammed by using a staking pool? Yes, for sure. If you have to send your coins away to another wallet, there’s a chance that you might never get them back. What happens if users decide they want to withdraw their HNT from the pool? Seems like a very risky proposition to me, since there’s an approximately 5-month cooldown time.
The other risk is that small staking pools might not have enough HNT to operate. If a pool has 29,999 HNT, the owners can’t create a fractional validator. That spare 9,999 HNT does nothing. As the price of HNT increases, ownership will likely become more fractioned. Many pools will fail to operate properly and may feel obligated to push fake metrics in order to mislead people into thinking they’re earning HNT.
When is Mainnet Going Live?
It is supposed to launch at some point in Q2. Trust me, I’ll be one of the first people to set up a validator, provided I have the HNT!
Running validators with HIP-25 is an exciting improvement for Helium. People are excited about the prospect of being able to earn a return on their investment by joining consensus groups while securing the network. Let me know below if I’ve missed anything or if you have any questions. I respond to everyone.