Blocknet Staking – Everything You Need to Know

Blocknet (BLOCK) is an innovative cross-chain platform that enables atomic swaps and decentralized exchanges based on a true peer-to-peer protocol. Thanks to this solution, users can transact directly between each other with no middlemen, no matter the coin they own, nor the blockchain they’re using. By staking Blocknet, you’ll be able to earn a relatively high ROI annually, secure the network and confirm transactions.

In this article you’ll learn all there is to staking Blocknet, how to configure your wallet and optimize your profits.

How to Stake Blocknet

Blocknet staking works on a principle of randomness. For each block created, 30% goes to the staker that confirmed it and participants’ chances to be selected for the job increase with the number of coins they own. One of the reasons why staking BLOCK coins might be of interest to you is the ability to run atomic swaps. I’m sure many of you will appreciate the availability of this function and the benefits it brings, namely independence and the possibility to freely negotiate terms, while also having instant transactions. Another reason to stake Blocknet is the fact that Bitfinex is currently partnering with Blocknet to use their protocol for their own decentralized exchange – Ethfinex. The integration of Blocknet alongside other major projects will allow for increased interoperability, support for smart contracts and thus further increase the network’s value. Before we continue with the wallet configuration, check out the list of minimum requirements required for staking Blocknet.

Minimum Requirements

• Windows / MAC / Linux
• Installed Blocknet Core Wallet
• Minimum disk space of 12 GB
• 1 GB RAM
• No minimum or maximum internet speed
• You need to keep the wallet online 24/7 (if you decide to log out of your wallet or shut down your PC, it will stop the staking process (cold staking is not available)

Summary: Currently the possible option is to buy cryptocurrency for fiat at Kraken for example, then trade it to an exchange where Blocknet is listed (like Bittrex). The next step is to exchange the currency you bought for Blocknet. Once you’re done with that, you should install the core wallet, encrypt and backup it, then transfer your coins from the exchange to the wallet. After 60 confirmations (one hour) you will be able to unlock your wallet for staking.

BLOCKNET WALLET SETUP (GUI)

Step 1: Download & Install the Official Wallet

Download the latest wallet release from https://github.com/BlocknetDX/BlockDX/releases with the “Latest Release” tag. Please do not use a “Pre-Release” build. Extract the downloaded archive and run the blocknetdx-qt executable. Remember that you need at least 12GB free disk space to host the Blocknet blockchain.

Step 2: Let the Wallet Sync

This process should start automatically from launching the wallet. You need to wait for the whole blockchain to synchronize before your wallet is fully functional.

Step 3: Encrypting the Wallet

Encrypting your wallet allows you to set a password for anyone who is trying to use it. This helps protect against thieves or unwanted access to your funds. You can encrypt your wallet by going to Settings -> Encrypt Wallet.

blocknet-wallet-encryption

A prompt to create a password will appear. Make sure to back up this password in a safe place. It may be required to restart the wallet after the encryption.

blocknet-encryption-password




Step 4: Backing up your Wallet

Stored in a safe place, a backup of your wallet can protect you against computer failures and many human mistakes. The backup allows you to recover your wallet when needed. You simply need to go to File -> Backup Wallet and to choose the desired filename for your backup.

blocknet-backup




Step 5: Transfer Coins to the Wallet

Once fully synced, you will need to deposit funds to the wallet. You can withdraw your coins from the exchange where you bought Blocknet and send them to your wallet. To view your wallet address, go to File > My Addresses.

blocknet-address

Step 6: Unlock the Blocknet Wallet

To start staking, go to Settings > Unlock Wallet. Enter the password created above and then click the “OK” button. If the funds were just deposited for the first time, they need to mature (reach confirmation threshold) so it may take an hour or so for the icon to turn green (60 confirmations).

STAKING WITH THE COMMAND LINE WALLET (CLI)

Your second option for staking is using the CLI wallet. This one is for advanced users or those of you seeking a less resource intensive alternative. To operate with it, you’ll need some command line skills and knowledge of Linux and VPS operation is a plus.

Step 1: Download & Installing

Let’s begin the process by downloading and installing the wallet. Open your terminal and type in the following:

sudo apt-get install git 
sudo apt-get install curl –y  
curl –s https://api.github.com/repos/BlocknetDX/BlockDX/releases/latest | grep browser_download_url | cut –d ‘”’ -f 4  

These commands will provide you with the latest official release of the wallet. For the purposes of this example I’ll be using Linux, so we’ll need to download the appropriate file and extension. In this case, x_86_64-linux ending in .tar.gz. Copy the link for the next command.

wget [Paste the link which ends on tar.gz]

Example:

wget https://github.com/BlocknetDX/BlockDX/releases/download/3.10.5-redesign/blocknetdx-3.10.5-x86_64-linux-gnu.tar.gz

After you’re done, unpack and then remove the junk file. Change the numbers if you have a newer version.

tar -xzvf blocknetdx-3.10.5-x86_64-linux-gnu.tar.gz rm -rf blocknetdx-3.10.5-x86_64-linux-gnu.tar.gz

This will remove the file which we unpacked. Be careful which blocknetdx file you remove. The one that ends with .tar.gz needs to be removed.

Next up, launch the wallet using the line below:

cd blocknetdx-3.10.5/bin
./blocknetdxd -daemon 

Keep in mind that the newest version available, at the time of writing this article, is 3.10.5. Your version might differ, so adjust the numbers accordingly. To make sure you’re not typing wrong, use the double tap feature:

cd blocknetdx-[double tap]  
cd bin
./blocknetdxd -daemon

The client will stop the launch because it doesn’t have a rpcuser and rpcpassword in its config file. Don’t panic as this is normal when starting the wallet for the first time. Type in:

cd ~/.blocknetdx
nano blocknetdx.conf

Now you need to type in a rpcuser and rpcpassword. Type in:

rpcuser=[Replace with a username]
rpcpassword=[Replace with a password]

Press Ctrl+X, V and Enter. Now let’s go back to the wallet. Type in:

cd ~/blocknetdx-3.10.5/bin
./blocknetdxd -daemon

Step 2: Encrypt the CLI Wallet

As we mentioned before, encryption is a crucial step towards your security. Type in the command below to encrypt your wallet. Replace with the password of your choosing.

./blocknetdx-cli encryptwallet [your password]  

Remember your passphrase as if you forget it, there will be no way to restore access to your funds.

The wallet will stop. You’ll need to launch it again with the following command:

./blocknetdx –daemon 

Step 3: Backup the CLI Wallet

This step is extremely important and should not be skipped. To back up your wallet type in:  

./blocknetdx-cli backupwallet [Your selected folder / external driver / USB] 

Example:

./blocknetdx-cli backupwallet ~/blocknetdx-3.10.5/bin 

Step 4: Transfer Coins to the Wallet

Now it’s time to create an address to which you can send your coins for staking. Type in:

./blocknetdx-cli getnewaddress  

Go to the exchange where you have your coins and send exactly 1 BLOCK to the address. After you confirm that the coins are on their way you can send the rest of your coins.

Step 5: Unlock the CLI Wallet

Before we can start staking Blocknet we need to unlock the wallet. Type in:

./blocknetdx-cli -cli walletpassphrase [passphrase] 0 true 

<passphrase> – the passphrase you used to encrypt your wallet.

0 – number of seconds which your wallet will stay unlocked. 0 means unlimited.

true – unlocked only for staking.

And that’s it. You should be ready for staking.  Now let’s check your staking status. Type in:

./blocknetdx-cli getstakingstatus

This command will show you which necessary steps are done, and which are not. If you see “false” that means that that step is not configured or incomplete.

Blocknet Staking Reward

Now that you’re already staking, it’s logical that you would be interested in learning how Blocknet rewards are distributed. For each block, the sum of coins rewarded is split 30/70 between staker and masternode. To be exact, the block reward is 1 BLOCK and as such, the staker receives 0.3 and the masternode operator 0.7 BLOCK. The return on investment you can expect is between 9% and 14% for the first year.

The probability of earning a block reward can be calculated by dividing the amount of BLOCK you’re staking, and the total amount of coins staked in the network. Besides block rewards, in the future, stakers can also expect part of the fees from exchanges, but those are currently limited to service nodes only. While on the topic of masternodes, they do see a higher ROI but to establish one, you’d need to invest at least 5000 BLOCK. Furthermore, it is recommended you run multiple full blockchain wallets to increase your chances of profit and receive fees for transactions, depending on the type of coins processed.

Should you decide to start staking Blocknet, you will see an ROI near that of Service nodes, however, you have the added benefit of being able to start with an amount you see fit. The downside is that staking in general depends on luck. Unlike hosting a node, where the initial payment is bigger, but the income is guaranteed and more easily calculated. In any case, both options will yield satisfactory results and it’s a matter of personal preference which one you choose.

How to Maximize Rewards

In all honesty, there’s no direct way to influence the amount of coins rewarded. Adding to that, the Blocknet wallet doesn’t currently support any way of optimizing your chance of income, such as Coin or Dust Control.

I don’t recommend joining a staking pool either, as it’s a risky endeavor and there are no pools recommended by the official development team of the coin.

Useful Weblinks

Official Website: http:// blocknet.co

Announcement Page: https://bitcointalk.org/index.php?topic=829576.0

GitHub: https://github.com/BlocknetDX/BlockDX

Block Explorer: https://block.ccore.online

Whitepaper: https://www.blocknet.co/wp-content/uploads/2018/04/Blocknet_Whitepaper.pdf

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