I would like to help the NEM network by running and operating some supernodes in various locations. I’m new to NEM, but I’ve got some sysadmin skills. After reading the whitepaper and some of the code, I was convinced and invested a few thousand dollars. However after reading more, it looks like it’s maybe not feasible for me to operate any supernodes, as it would cost 3,000,000 XEM (over a half million dollars!) for each node. I understand the need to ensure people are really serious, but at the current price, how will anybody join? I’m serious, and I can’t. How will the network grow?
You can run a node without joining the supernodes program. It will help secure the network just as any supernode. The only difference is that a supernode has to exhibit certain prperties with regards to bandwidth, availability,…
That’s my point - I’m in a position to be able to ensure those bandwidth and availability targets are met.
Unless you find someone providing the necessary xem you cannot set up a supernode.
But again, for the network it is not important if the node actually has joined the supernodes program.
Oh, is that the intended model? To find a sponsor to give the xem to be able to join the program? I’m honestly trying to understand the incentive structure here. I thought the supernode program was meant to incentivize people to add fast servers to the system and maintain a high quality of service, but maybe no more incentive is needed…
It is, and we already got a very strong network due to the program.
Lately xem price has surged so it is getting harder to grab enough xem to be able to join.
You are a bit late therefore…
Got it, the program is effectively closed to newcomers. I’ll direct my energy elsewhere.
Due to the price rise, this supernodes are now much harder to obtain. However supernodes don’t add anything more to the network than a well set up node. If you want to set up a reliable node, I still encourage you to do so.
there was a time when you could fund a supernode for 1-2 BTC.
The network is very robust now, but you can still harvest and earn fees with just 10,000 XEM…
I was interested in a regular node… which for me is still pretty pricey. But I am not super clear on how it works. I thought I could buy 10k xem then set it on “farm mode” then put my code in the safe and come back in 5 years to see what happened.
But I watched a youtube instructional video talking about how it works and it seemed my idea would not work. According to the video I would have to buy 11,000 XEM because of the way in which the XEM gets dedicated to farming, and that because it’s a very slow process it would take a few months for the 10k to become dedicated.
Was the video correct? Or is it as easy as buying 10k xem and clicking a button and instantly dedicating it to have it farm?
I was drawn to investigate this coin due to the current market capitalization with respect to other alt-coins.
I see that the market cap may be slightly inflated due to the 9 billion coins in existence, but that all depends on who owns the coins and what incentives they have to flood the market.
Nevertheless I was intrigued by this project being written in Java, having a slick mobile app and clean interface. Not just another bitcoin fork. Part of my evaluation of a coin is assessing the barrier to entry from both a network participant and a user. If any of those are particularly difficult or non-workable, the coin is a non starter for my investment portfolio. For example, if I can’t compile the P2P network node software or the wallet is just garbage and doesn’t have an easy way to backup and import, it’s junk and I move on. NEM impressed me on both those fronts although the documentation on building an NIS node could be better.
I run application servers for a living, DevOps and such. I built a Docker container running the latest NIS version which could easily be migrate to the cloud and run there quite reliably.
I was disappointed to see that I would need 3,000,000 XEM to make it a supernode which is equivalent to $640,394 USD at the time of this post. Assuming I had the ability to buy that much, and would be willing to wait for it to be vested, what kind of a return on investment would I be expecting by running a supernode?
Why is it worth my money to be tied up in this versus something else, say a traditional bond or some other coin that offers PoS rewards?
It seems to me that this supernode requirement is most likely only practical for the developers who received the first allotment of coins, or long time speculative holders. What is to stop them from flooding the market with their coins and moving on to a more profitable investment as I have described?
At this time, it would cost $2100 USD to buy enough NEM to function as a regular node. That seems more realistic for someone seriously interested in this, which I may do if it can be profitable. I think NEM is a great idea and I’m a big fan of the anti-establishment nature of cryptocurrencies, but let’s be honest, we are all in this to make money.
I believe the minimal AWS tier required to run the NIS server would be something like $20 a month. (I haven’t done an analysis of storage or network traffic in the NIS server yet, so this is going on the 2GB memory requirement.) For an initial investment of $2100 and the monthly VPS hosting fees, what kind of return would I expect at this time for that? Would I receive more than $20 a month in rewards? If not, why should I bother with the administrative time and effort to maintain such a thing? Thanks.
1 Like
I think you are confusing harvesting with supernode.
Harvest - Having your own node is optional to harvest. You can choose to use one of the public nodes(mostly supernodes but not all) to harvest for you, it’s called delegate harvesting. Once you assign a delegate node from the dropdown in your wallet, you can shut off the device the wallet is on and the remote node will harvest for you. So you don’t need AWS to harvest, it’s completely free.
Supernode - 140k Xem is divided among all supernodes daily. Currently that comes out to be approximately 300 xem/day. This is on top of whatever your wallet is harvesting.
Run NEM supernode only if you believe in it. If you only care about making money short term, do Dash. I think currently Dash pays about 5% annually and Nem only 3% for running supernode with coins locked up.
There is no inflation in men, which means there is no block reward for harvesters.
Harvesters collect only transaction fees.
In the beginning most of blocks were empty and that was no real incentive for people to run high performance nodes, which can cost a lot to run.
These nodes are needed, because NEM Plaveč that all users will run light clients with no need to download blockchain.
Supernode rewards program will not last forever. It is not something built in the protocol (like in dash). It is only to bootstrap the network until there are enough companies/big players relying on NEM and running high performance nodes.
In the beginning 2240000 XEM were distributed to more than 1500 people. When supernode rewards program was announced, the extra 800000 was around $300 and supernode rewards did not even cover for running VPS ( supernodes have to pass performance tests every day in order to get reward). But lots of people were running nodes anyway because they liked this project.
Before the price spike there were around 450 supernodes, most of this people will hardly sell any XEM because they like the project and had XEM since beginning.
So when committing to delegated harvesting, the investor does not have to run their own node and their only real cost is simply the opportunity cost of holding and not selling?
That is correct. Delegate harvesting is what supernodes are for, to provide harvesting nodes for those who don’t have their own node.
So suppose I bought 10,001 XEM for $2100 today and I wait 90 days.
After 90 days I am now fully vested to unlock delegated harvesting and choose to do so.
At this point, I have tied my money up for 90 days already with no return which could have been earning interest elsewhere (Time Value of Money etc…) but for argument’s sake let’s say that is inconsequential and equal to inflation so kind of a wash.
What sort of return can I get on my money going forward?
Buying and holding and hoping the coin price goes up, cashing out and taking profit (or loss) is speculation and not investing.
What dividends do I get?
You get to vest 10% of unvested xem every 24 hrs…so you can always buy 100k xem and wait only 1 day then sell the remaining 90k xem the next day, just to give you a visualization.
How much you get is based on luck. For example, if I have importance score of 3% I may get 3 blocks a day and if you have only 0.3% maybe you get 1 block a week. However, if all my blocks contain 0 fees and your one block contains 100 nem, you make more than I do.
POI improves the number of blocks you may get but what those blocks contain is purely luck.
Edit: When you sell xem, part of it will be from vested XEM proportionally so my method wouldn’t work
You could still run a NIS helping to secure the network, while earning harvesting fees by pointing your NCC to your own NIS.
1 Like