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Confessions of an Ethereum Staker

Well, my friends, here we are on the cusp of an historical moment. The long awaited, long anticipated beginning of the Ethereum 2.0 upgrade. Proof of Stake and everything that goes with it! Well, everything in Phase 0, at least.

Excited is not the right word, somehow. I’m definitely excited for the researchers and the developers, the speculators, and the community who have been waiting oh-so-long for this moment. And yet… well, it’s a bit overwhelming. All of the research, specs, code, bug fixes, the articles, discussions, disagreements…the flood of news hitting my timelines every day. It’s a lot to keep up with.

But we need to keep up to reach our destination. The testnet is the next stop. THE Ethereum 2.0 testnet. The last one (probably, maybe) before the production mainnet is launched. Its name? Medalla. And rumor has it (update — it’s real) that participation boasts a very special reward — a POAP digital medal — recognition à la NFT for validators who participate in the genesis event.

Are you staking? I’m staking. At least I think I’m staking. But I’m not sure how I’m staking. And I know some things about staking. I even wrote an article about it. But without knowing the specs and the code and the client software inside and out, I don’t really know much about it. There will be a Launchpad — a website to help with deposits and to get set up as a validator. I wrote an article about that, too. Client teams are no doubt preparing their own on-boarding experiences, or perhaps will integrate with the Launchpad. Also preparing are the staking pools and institutional stakers. Exchanges are getting in on the act, too: ‘buy ETH from us and stake it for a fee!’ What about tokenized staking? Yep, that’s a thing. Own the tokens, put your feet up, and relax! Sell them to someone else when you’re done with it all!

It’s a bit much, sometimes. I’m so ready, that I’m not ready. At least that’s how I feel. Staking requires that my money is at stake. And of course that makes me nervous. I want to feel safe and secure. I want everything to be just so. I’m a software engineer by trade, and my expectations are that things should be elegantly laid out, clean in their execution, without complexity or redundancy. And if things don’t go well there’s no going back — deposits are generally a one way affair in Phase 0 land. Try explaining this investment to the unenlightened.

The Medalla testnet is my last chance to figure it out. Which client will I use? I’m not sure. There are seven. I wrote an article about that, too. We should be diverse. Embrace decentralization, they said. Perhaps even run multiple clients — good for security, but more opportunities for me to mess it up. If I use anything other than my own setup the penalties for misbehavior or disruption are more severe. How severe? No idea. I don’t know the code or the specs, remember? Decentralization is rewarded. So to pool, or not to pool? To cloud, or not to cloud? Maybe I can try staking at home, if my internet connection is stable and has sufficient bandwidth. And the power doesn’t go out. Hmm, I might need a UPS…

What if there’s a flood, a fire, a theft… ugh… What about storage? The all important SSD on PCIe. What size will I need? I think half a gig for the beacon chain, and another 1 TB to future proof me for the shard chains I will serve. What about the ETH 1.0 node that I’ll need during Phase 0 and Phase 1? I can use a hosted one, but if it goes down — penalties, baby! I can host my own, but how much extra disk space will I need? Not sure. So go with expandable storage or just start out big. Okay, make a note to figure it out. Maybe somebody else will and share their answer. Better keep an eye on my flooded timeline.

Maybe I’m overreacting. Everything will be fine! I won’t screw up the validator deposit during genesis, losing my deposit and my dreams with it. My finger will be trembling as I press the submit button, I can tell you that. And what if I screw up my validator keys? Maybe I’ll lose them. Or accidentally delete them. It wasn’t easy to set those up. Did I air-gap correctly? How do I back them up? I think key management is much better now, but I’m not up to date with the latest and greatest. I should probably write another article.

And the returns? What about those? Pretty important. Nobody is completely sure what will happen. I think we will see around 6–8 million ETH staked (just a hunch). At that range, we can expect to see a return somewhere between 5–10%. Probably enough to cover my costs, depending on how much ETH I’m staking, depending on what my staking setup is. The damn UPS might push me out of profitability. On the other hand, a power outage in the cloud, or a hack in the pool might be much more devastating. So many decisions!

I’m forgetting something else. My faith. I’m not a religious person, but I have faith in the passion, skills, dedication and perseverance of the scores of Ethereum developers, researchers, hobbyists who are working every single day to move us closer to a stable and reliable Ethereum, The Next Generation. I have faith in myself, too. I know some things. Just take it slow. Read up, understand, learn. Well, I don’t have to be an expert. It’s cool to be a researcher, a core dev, a client implementer. Those people know things. After all, that’s why they are working so hard — to make it easier for you and me.

I’m also going to make myself a promise — that no matter what, I’m going to be staking on the Ethereum mainnet. Genesis all the way! It’s what I’ve — we’ve — been waiting for, after all. And what’s more, it’s going to be fine. We will be fine. I won’t lose my deposit. I’ll find a staking setup that’s right for me. I’ll get monitoring in place with proper alerting so I can sleep at night. And come November 13th 2020 (just a hunch), the World Computer will light up with the power of 250,000 deposits of 32 ETH, and folks, we will be a part of history!

Written by

Passionate about Ethereum and decentralized technology.

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