Now that we’ve covered the basics of Blockchain, DeFi, and staking pools, we’re going to give you the rundown on how to start staking ADA and managing your pool. We’ll be dealing specifically with all of the procedures as they pertain to Cardano/ADA, so while a lot of this knowledge is transferrable to other blockchains, it is by no means universal. As mentioned previously, there are 2 ways to earn rewards as a currency holder: either run your own ADA staking pool or take part in someone else’s.

While the previous article got down a lot more theoretical aspects, we are now covering how to create a cryptocurrency mining pool. Even if you’re only looking to stake without running a pool, there might be quite a few useful tidbits in here for you. This will focus on the practical aspects of starting and running a pool but is not a comprehensive look. It serves as a series of basics with some good rules of thumb thrown in.

The Basics of Staking Cardano / ADA

Let’s go into a few of the previously covered terms to catch everyone up to speed and relate them to more practical aspects. As you may be aware, there is no Cardano mining software, as the ADA currency operates on a PoS system. This is where crypto staking pools come in.

Stake pools are nodes on the Cardano blockchain featuring a public address that anyone can join if they have the minimum balance required. Stake pools are responsible for the validation process, as they create further nodes, with the chance of this creation being positively correlated with the amount of ADA they hold. Pools can be run by both individuals and organisations, but they require a lot of know-how and hardware resources (more on this below).

Stake pools that experience a lot of downtimes are less favourable, so it takes a lot of effort to keep one running. Unreliable operators can receive penalties from Cardano, so it’s not a task to take lightly. Once you start a pool, you need constant engagement and growth to keep it going. This is a big undertaking that requires a range of different skills, as we’ll cover below.

Technical Requirements

In terms of hardware, the bare minimum necessary to run a pool is:

• 8 GB of RAM
• A network connection with 1 GB of bandwidth per hour
• Broadband internet connection with speeds of at least 10 Mbps
• A public IP4 address
• Two separate servers: 1 for block producer node, 1 for relay node
• One air-gapped offline machine (cold environment)
• Operating system: 64-bit Linux (i.e. Ubuntu Server 20.04 LTS)
• Equivalent to an Intel or AMD x86 processor with two or more cores, at 2GHz or faster
• 20GB of free storage
• Reliable electrical power
• At least 505 ADA for pool deposit and transaction fees

Knowledge-base

The technical hardware requirements are extensive but not as stringent as with other cryptocurrencies. They are also relatively cheaper, yet there are other barriers to ADA staking. The main one being that of skill: it takes a lot of technical skills to run a pool.

This barrier exists is for good reasons after all, since one has to handle so many people’s investments. It only stands to reason that having a technical background means you won’t abuse people’s trust and run things poorly. The whole blockchain can lose credibility if there are too many bad faith or irresponsible actors.

The bare minimum skills must include system operation knowledge, experience in DevOps, server operation and maintenance, and Prometheus or Grafana knowledge for alerts and monitoring. The Cardano Foundation even has a stake pool school that operators must pass before they can run their staking operations.

These courses cover everything from setting up AWS and Cardano nodes to generating keys to maintaining optimal performance. It is highly recommended for beginners to check these online resources. Suffice it to say, there are a lot of things to learn, so we’d recommend looking into more in-depth learning resources. Joining a course is highly recommended as operating a staking pool can be arduous without the proper knowledge.

Registering Your ADA Staking Pool

If a new user wants to operate a pool, they will first have to register it. This can only happen after they install a node from a source, register their stake address on the blockchain, and generate the keys for the stake pool. This part requires quite a bit of Linux operating, which is covered in more detail by Cardano in their courses.

After these steps, you can start earning rewards, but your stake pool will need members to increase its viability.

Cryptocurrency Digital Marketing Tips

If you want to attract people to your stake pool, a good marketing campaign is a necessary step in differentiating it from other pools. Aside from gathering more delegates, it also helps keep them interested and builds up stock in your pool, inform your constituents about changes and updates, etc. Constant marketing is thus a cornerstone of maintaining a staking pool.

Getting a website and blog up and running is a must. It’s important to the point of being obvious. With so many cryptocurrencies out there, you need to stand out, so just having a webpage to redirect people won’t be enough. Digital promotion is your main venue of marketing with some channels more prominent for cryptocurrency promotion than others.

Another must-have channel is BitCoinTalk. While not as big as it used to be, its main benefit is that it’s dedicated to DeFi operations, so you won’t get any waste readership. Unlike every other channel, everyone there is at least interested in the topic. A link to BCT is also a place where most currencies are registered, so it’s nice to at least have your name on there.

Note: just because a channel is more prominent it doesn’t mean it’s better or more effective inherently. Prominence also means saturation which means more competition. Channels with lower saturation can provide ample growth with fewer currencies fighting for attention, but this can also be uncharted territory.

Prominent Channels

There are a plethora of different channels that stake pools are employing. Each plays different roles and it’s important to understand these disparate functions. As with most marketing endeavours, it’s important to be on as many channels as you can manage. Here are the must-haves:

• Twitter: Twitter is the easiest way to update people and promote a stake pool. As a platform, it is concise and simple, with little marketing know-how required (compared to other platforms). This same factor can also be a curse, however, as you are severely competing for everyone’s attention.
• Reddit: Reddit has been a major source of crypto discussion and growth. It’s also a place where a lot of financial organising can take place (as Wall Street learnt recently). The crypto community is very active on the platform, offering a large place to promote your pool. While Reddit is a more informal channel than most social media like LinkedIn, this is also what makes it potent.
• Youtube: Youtube has tons of resources for promoting your pool and getting people interested in cryptocurrencies. You don’t need expensive video production levels (although it does help), as live streams and more guerrilla operations are also doing fairly well. While they may not garner the traffic you’d see on major YT channels, often hour-long live streams draw in people with diehard interests, so the quality of audience over quantity might play to your favour. Influencer marketing is also a great promotional tool.
• Telegram: Telegram is great because it provides direct communication (encrypted messaging) and mass communication (the kind you get from other social media). It’s a lot like WhatsApp, but with a newsfeed and more, bigger social media options. Also, it’s far more secure. The EU ADA pool, for example, uses it extensively.

Less Prominent Yet Still Profitable Channels/Question Marks

The less prominent channels are still necessary but in small doses. Advisably, don’t spend too much time fixating as these ones can sap a lot of your time and energy. If you can make some of these work, that’s great. It’s still preferable to have these accounts on hand.

• TikTok: TikTok is a more peculiar form of online social media with a style and interactive language that is still developing. If someone can find a way to make it work on TikTok, they will be set. On TikTok, even the most prominent blockchain channels have varying levels of views. They have a decent, sustainable average but the standard deviation of the view counts can wide from video to video.
• Instagram: Again, there are users who became popular using this platform but it requires a lot of effort. Don’t turn Instagram into a full-time career at the expense of a wider goal.
• Clubhouse: This one is up-and-coming with a lot of prominent cryptocurrency advocates on it.
• Medium or Steemit: These sorts of blogging-based social media are good for long-form content. You can re-post your blog content on it as an alternative publishing and promotion source.

Cryptocurrency Advertising Tips

Cryptocurrency advertising is a tricky thing. There’s no easy way around it: in many segments of the general public, digital currencies have a bad rep. From the reputation for scams to the penchant for use as illegal trading to the perception of volatility, the average person can have a lot of different notions in their heads. This is why general advertising will often arouse suspicion and will not be effective.

This state of affairs may change, but there’s no need to mince words about it right now. The most prominent marketing tools (currently) are the ones that target specialists. Content marketing activities with an informative bent such as posting on Reddit pages, filming YouTube videos, and running telegram channels (similar to an informative newsletter) are more common.

It would be advisable to build a reliable brand with dedicated enthusiasts before widening your target market. These advertising rules are by no means laws, but suggested guidelines. It’s more of a general state of the zeitgeist right now. With growth, these rules may change and standard advertising might become preferable.

As of now, new cryptocurrencies have a far longer purchase funnel, with more research before investment from consumers. The purchase funnel gets smaller as a currency becomes more popular and more ubiquitous. This isn’t just because there is more user trust, but also because there is more information available about said currency. Thus, it is even more pertinent to develop a branding strategy.

SEO Tools & Online Metrics

Have Arhrefs or SEMrush on hand. This is a given for any digital marketing operation, but especially for crypto. As a widely online phenomenon that goes through rapid changes, it’s useful to keep an eye on the changes happening. Keeping track of these in real-time is tricky, so it’s also useful to check keywords and use them to personalise your Google alerts. Note: More on how to use SEMrush right here.

Google Search Console is another great tool to measure how you’re fairing. Link up your website, check your Google analytics, and manage your tags. We’ve covered this previously so we’re not going to go into depth about it. These are just important steps to keep your website running smoothly, as it will be your base of operations.

Frequently using the Cardano staking calculator on their website is also important to keep track of how much you could be earning in rewards. These are estimates, but they can still be important. It can be a useful tool in planning for future windfalls.

Benefits of Running an ADA Staking Pool

Cardano Blockchain is Evolving (For the Better)

An ADA staking pool has distinct benefits over contemporary cryptocurrencies. One of the main ones is the Cardano blockchain, which offers more than an ADA trading platform. Beginning in 2015, Input-Output Hong Kong (IOHK) developed the Cardano Project, helmed by the co-founder of BitShares and Ethereum, Charles Hoskinson. This experienced team took their existing knowledge of blockchains and formed a brand new one.

Aside from setting up an ADA staking pool, Cardano will also allow people to make smart contracts. This is another element of decentralising finance that gives people the ability to form contracts with multiple parties without the need for an intermediary or authority. It’s could provide a simple way of organising workflows.

After an eventual update, Cardano will operate on a dual-layer system where each one of these operating tiers serves a separate purpose:

• Settlement Layer: The settlement layer is the one that is currently fully operational. It provides the ability to send and receive ADA coins like most other blockchains with a wallet system.
• Computation Layer: The computation layer is still under development. After launch, it will allow users to create and enter into smart contracts.

Every ADA Staking Pool Utilises Ouroboros

As mentioned in the previous blockchain article, ADA operations rely on the Ouroboros protocol. The benefits of ouroboros are:

• Ouroboros is far more sustainable than the competition. Energy consumption is a major issue for blockchain, with Bitcoin in particular being very harmful to the environment. Aside from that, your personal electricity bills, time, and effort are also saved.
• It is fairer in its stake distribution than other PoS systems.
• While not the quickest, it is faster than a lot of other PoS while still maintaining one of the safest blockchains. Cardano performed a test in late 2017 that allowed the blockchain to process 257 transactions per second. This was significantly more than Bitcoin and Ethereum. They are upping the ante constantly and hope to raise speed levels even more.

Range of Wallets is Improving

Cardano wallets are available in multiple forms: Online, Mobile, Software, Full Node, and Hardware. This gives users a lot of storage options on the blockchain. Each of these has its benefits, so it’s up to the user to examine what positives they gravitate towards and which drawbacks they find most bearable. This can range from the level of security to degree of usability, so find ADA staking wallet that matches your needs.

While the official Daedalus wallet has not always received the best reviews, there are several different options that users can subscribe to. The alternative choices are pretty good though, from Yoroi to Ledger Nano S to Trezor. The wallets also offer dual iterations of Cardano, in case users might need them (Shelley and Byron).

What Do ADA Staking Pools Contribute to DeFi?

Now that we’ve covered what you get from ADA and Cardano, let’s look at what your presence on the blockchain contributes to the Decentralised Financing effort. Every ADA staking pool grows the entire blockchain, providing more nodes to the validating process. This helps Cardano grow and develop as a platform.

Currently, Cardano’s blockchain is still developing a lot of new functionalities. It will enable smart contracts soon, enabling all sorts of business exchanges and consumer finance management options. To do this, it will need to grow and develop more nodes, become more prominent, and thrive. Thus, when more users join, they are helping this multi-faceted technology develop.

It also helps the DeFi effort. Decentralised finance could create new models of sharing which remove middlemen from the process, thus building more value for users. This enables ordinary people to take more control over how their finances are distributed.

What Can Pools Accomplish?

Pools are also helping create new possibilities for unshackling institutions from the problems of financial centralisation. The EU ADA pool has been prolific in educating the public about the benefits of DeFi and advancing the cause through its operations. The EU ADA pool is still growing and gaining a lot of traction.

Cardano pools also have the ability to help developing nations operate with more robust finance systems. Cardano and various pools have already valuable resources in Africa. Decentralising such transactions can make the system more efficient and take away human error. It also provides a lot of transparency in transactions that can get complicated and be in industries prone to fraud or corruption.

In growing the capabilities of a blockchain, Cardano can serve as a valuable blockchain for insurance companies, banks, and so many other institutions that require quick and easy business transactions. Stake pools are a major part of this growth prospect as they form the foundation of a blockchain.