Michael Rainwater From iNodez on How He Built a Shared Smartnode Service for the Raptoreum Network
🔥Crypto Fireside #22 — Interviews with crypto people.
🔥Crypto Fireside #22 — Interviews with crypto people.
🔥Hello! Who are you, and what do you do?
MR: Hello! My name is Michael Rainwater and I am the CEO of iNodez — a shared smartnode hosting platform that currently supports the Raptoreum (RTM) ecosystem. I’m also the technical writer for the Raptoreum cryptocurrency project, having written both the smart contracts and assets technical papers.
Smartnodes are the RTM version of Masternodes. They currently do not validate transactions on the RTM network, but they do run chainlocks that prevent a 51% attack from being possible on the RTM Proof of Work network.
To build an RTM smartnode, it currently takes 1.5 million RTM collateral (currently just over $30,000 at the time of this interview) and a server to perform the smartnode work that allows the node to earn rewards. That’s where iNodez comes in. To ensure that ANYONE can stack RTM into a smartnode and earn rewards for helping to secure the network, we allow users to pool RTM together to build new nodes and earn a proportional share of the rewards that they generate.
Users interested in RTM need only a minimum of 500 RTM or about $10 worth at current prices to join iNodez and start earning passive rewards. We even created the ability to mine directly to your stake in iNodez to increase your collateral over time with minimal effort. On top of that, users can elect to compound their earnings by having 5–100% of rewards earned sent back into the nodes twice a week after rewards are distributed.
iNodez charges nothing upfront for users. Instead, we keep 6% of the rewards earned by each node and then distribute the remaining 94% across the node participants proportionally based on their total share of that smartnode. This means the only cost for the user to join is 500 RTM. Any collateral contributed to Shared nodes can be requested for later withdrawal inside of the iNodez app. For the nodes to remain stable, we process withdrawals on the last day of every month.
You can either deposit or mine RTM with a CPU or a GPU directly to your onboarding address that is assigned in the app upon your first login. From there, users can control the address designated for reward payouts or they can choose to have their rewards automatically compounded twice a week.
The auto compounding feature and the ability to mine directly to your onboarding address are both popular features. Over 80% of users elected to compound their rewards in order to invest their total collateral share size automatically.
2FA is available on the app and it is recommended for added security. We believe we have succeeded in our goal of making it easy for even beginner cryptocurrency users to utilize the iNodez Shared smartnode platform to participate in building the RTM smartnode layer while enjoying an average weekly ROI of .68%
The goal was to make the user experience as easy and rewarding as possible and, so far I think we are succeeding.
🔥And how does RTM mining differ from other mining projects?
MR: RTM has a custom-built algorithm (GhostRider) in that it rotates a mix of over a dozen other algorithms. It does this block to block to make mining more competitive between CPUs and GPUs. So far, it has proven to be quite effective as mining RTM with a GPU will not provide significant advantages over a similar priced CPU most of the time. The other difference, of course, is that RTM has shared nodes providers like iNodez where you can mine directly to your onboarding address.
🔥What’s your backstory, and how did iNodez come about?
MR: I was a licensed public school teacher for about 6 years before finding crypto. I first heard about Bitcoin sometime around 2015, but I didn’t dive headfirst into the entire subculture until Thanksgiving 2017. I joined a social media group featuring crypto and was instantly hooked!
I grew up playing PC and console games. Having spent a good deal of time playing games like Diablo, Everquest, and Counter-Strike, computers and technology have always been a big part of my life. In 2018 I started learning about cryptocurrency networks and ran into the concept of Masternodes.
I learned how to build Horizen(ZEN) nodes on the TOR network and I found running them to be both rewarding and very enjoyable. I love knowing that the nodes I build and maintain are working all day and night to ensure that the network they support can function and create new opportunities for the users that utilize it.
When I landed in the Raptoreum discord server in January of 2019 I had already built hundreds of nodes for several different projects. My initial personal goal for being involved with Raptoruem was to amass my own set of private nodes as I felt strongly that it was a potentially game-changing idea to implement smart contracts in common programming languages.
RTM launched mainnet at the end of February 2021 and by May it became apparent that it was going to get more and more difficult for the average user to build and host their own RTM smartnodes. Although it didn’t start with the name, this is when the idea for iNodez began to take shape.
🔥Describe the process of launching iNodez.
MR: I started the project on May 5th, 2021 with a single shared node built with RTM contributed by several members of the RTM community that were willing to trust me enough to oversee the node and distribute rewards fairly.
I started with a Google sheet that tracked everyone’s share of the node and the rewards it had earned. At the end of every week, I would distribute the earned rewards to everyone’s personal RTM addresses. In the first few months, I operated at a loss for the singular purpose of building as many shared nodes as we could to support the RTM network. The rewards that were being paid by the smartnodes were not worth much fiat value at the time as RTM was still so new that it was valued at a few tenths of a cent and nodes were not earning much relative to the cost of hosting them on servers.
I was committed to only taking fees from rewards earned to cover hosting and I wanted to be sure that enough rewards were earned by participants so that we could accomplish our goal of growing the RTM smartnode network quickly. For the first 3–4 months, the 6% hosting fee that we would take from node rewards was not enough to even cover the operation. In the middle of that summer, the name iNodez was officially born and the iNodez LLC was formed in Wyoming, USA. By this time the monthly overhead had already reached over $1500.
I decided that operating at a small loss and keeping the RTM I earned was worth the benefit that the RTM network was seeing in terms of growth and exposure. I knew that smartnodes running chainlocks would be essential to ensuring that bad actors would not be able to successfully pull off a 51% double-spend attack on the RTM network.
Within a couple of months, we had grown from that first node to a few dozen and it was looking like continuing to run iNodez was going to become a more significant effort. By late summer, it became apparent that Google sheets were not a sustainable method of managing this thing. Every weekend I was performing rewards distribution for over 100 shared nodes by hand. It was then that I reached out to a close friend of mine about creating an app to manage the service and automate as much of it as possible.
We had just about 700 users when we launched the app on Halloween 2021. Fast forward a little over 2 months to today, Jan 2022, and we currently have over 5,000 members in Discord and over 10,000 users on the iNodez platform that are earning rewards!
🔥Take us through your daily process of what it is that you do.
MR: I’m the CEO of iNodez, but I also enjoy getting my hands dirty and being involved in the daily operations.
Throughout the day, I receive mobile notifications when enough collateral has been onboarded to build a new node. I also receive alerts if any node requires temporary maintenance. I’m the one that installs the nodes on servers and ensures that they continue to operate consistently. Twice a week, we perform a rewards distribution and consolidation cycle. We regularly check our security measures and database for any errors or inconsistencies to ensure everything is working properly.
I also handle customer service issues in the Discord server daily and am responsible for communicating updates, problems, and important events through the Discord announcements and iNodez Twitter account.
🔥What has worked to attract and retain users?
MR: The simpler we make it to participate, the more people join!
By giving users a personal onboarding address they can deposit, mine, and compound their rewards — the process of depositing and growing your personal RTM stack has never been easier.
Installing a full smartnode requires a good deal of collateral and maintaining a node can be technically challenging for users not familiar with Linux (or qt wallets in general). iNodez makes it simple by giving users one address they can send RTM to, placing it into a smartnode to earn a share of the RTM smartnode network rewards.
We give users the ability to control their payouts to any RTM address as well as the ability to automatically compound rewards twice a week to grow their stack faster. I have been highly active and engaged in the RTM community since the project was still in early testnet, so iNodez has been involved in giving away over 600k RTM in the past six months or so during special events in the RTM discord server.
We sponsored the first community-run RTM poker tournament by donating the grand prize pot. iNodez is also currently holding a logo design contest with RTM prizes for the winners. By actively participating in the community, iNodez has become well known in the RTM ecosystem and we plan to continue to support the project as it grows for many years to come.
🔥Why did you choose to build iNodez for Raptoreum, why not another project?
MR: The answer to this question is simple. No other cryptocurrency project that I am aware of seeks to create a smart contracts platform that will allow for development to take place in common programming languages. Simply put, the vast majority of software developers today do not have the knowledge to code in smart contract languages like the ones used by Ethereum, Cardano, or other smart contract platforms. On top of that, platforms like Ethereum have grown in price faster than developers can affordably develop upon them resulting in extremely expensive costs to launch new smart contracts and perform basic transactions on the network. Just look at the constant issues with GAS prices on the ETH network.
RTM has a coded spork that allows for the RTM-based fees for new smart contracts and assets (like NFTs) to be adjusted in the future should the market value of RTM rise or lower significantly. This will ensure that the fiat cost of development and the skills required to utilize the RTM decentralized smart contract platform will remain in reach for all developers and not just a select few in Silicon Valley.
🔥How are you doing today, and what does the future look like? Let’s talk numbers!
MR: I’m now working on iNodez full time after leaving teaching. We started with 1 shared smartnode in May 2021 and at the time of this writing, we are currently hosting 210 shared smartnodes on the RTM network. We’re working towards finishing the BETA of our official app so that we can launch downloadable packages for most devices that will improve the user experience even more!
The RTM mainnet launched on Feb 22, 2021. Since the RTM reward emissions are stable over the first couple of years, a simple way of estimating the potential supply metrics of RTM would be to double them in terms of raw numbers. If the percentage of RTM locked in nodes remains between 60–65% as it is today, it is likely we will have over 1,000 active RTM smartnodes and each node will earn somewhere around 740 RTM on average per day.
iNodez users currently earn around 3.19% ROI monthly on their RTM, although the return percentage will go down over time as more nodes are built.
This month we passed 1,000 followers on Twitter, 5,000 members in the Discord server and we just passed 10,000 users on our platform!
Thanks to the growth of RTM and the total number of nodes we host, the fees we take from earned rewards are now enough to cover all expenses as well as ongoing development. Our next goals include increasing the automation behind the scenes to improve compounding efficiency. We are also considering expanding to host shared nodes for other crypto projects, but we have not yet decided on one that fits our criteria.
🔥Talking numbers, you mentioned giving away a bunch of RTM, expand on that.
Yes — during one week I rained 100k RTM in the official discord server (that’s what we call airdropping), which was matched by some of the devs and community members by another 200k during our rain week event. For the new year, I rained 70k RTM during the last week of December.
In total, to date, I’ve rained over 600k RTM over time, which is worth approximately $12,000 at the time of this interview. There are currently 237 iNodez Shared smartnodes earning an average of 1480 RTM a day. That means that in a week, the current shared smartnodes will earn around 2.45 million RTM altogether (worth around $50,000 at today’s market price) that will be distributed across the more than 10,000 iNodez shared smartnode participants.
🔥Through launching iNodez, what is something you have learned that surprised you?
MR: It’s very hard to think of only one thing that I learned as I have learned so much from this experience, but I would say one thing that at least surprised me was the number of people I have met around the world through contributing to RTM and from building iNodez. I have met people from every continent excluding Antarctica through this experience and I am continually surprised to meet new people from places that I had never even heard of before.
🔥Mistakes were made. What were they and what did you do?
MR: One mistake was starting off using Discord as an authorization method for the app. We underestimated how many people might be susceptible to redirect click-phishing schemes, where bad actors post a link that is designed to get users to give up their Discord authentication token information.
About a month into the app launch, some unscrupulous individuals attempted to employ this method of attack to access other users iNodez accounts to replace payout addresses and create bad withdrawal requests. As soon as we discovered this was being attempted, we paused the entire withdrawal and rewards distribution process. I spent about 36 hours reviewing every single node reward distribution and several hundred withdrawal requests by hand to ensure that none of them were created suspiciously. We identified a couple of accounts that had been attacked and ensured that no RTM was lost in the process. Since then, we have employed an email-based secondary factor of authentication which requires users to click a verification link in their email before their account is unlocked for editing. We have had no more issues with this type of attack since then and we are proud to say that we will always do what is necessary to protect iNodez users from bad actors that would seek to undermine RTM at best and attempt to steal funds at worst.
🔥What have been the most influential things in your life? This can include books, podcasts, or people?
MR: Music has been one of the most influential things in my life. That and my background. I come from a broken home where both of my parents were drug addicts and I was raised by my grandmother for several critical years in my childhood. I learned very early on that I was going to have to work for what I wanted on my own, but it wasn’t until years later when I found crypto that the opportunity that matched my unique skill set perfectly finally presented itself.
Today I am surrounded by a supportive family and a tight-knit group of digital friends that I can count on to help me work out the most difficult problems that arise in my life and cryptocurrency experiences.
🔥Do you have any advice for other creators, entrepreneurs, or developers who want to get started or are just beginning?
MR: My advice would be to dive in headfirst and soak up as much knowledge as you can. Cryptocurrency is a steep learning curve, but once you overcome the barrier of understanding the basic mechanics behind distributed ledger technology, it should quickly become apparent to you that humanity has only barely begun to scratch the surface of what a decentralized, trustless economy might look like in the future. There is still so much room for growth and development that I believe there is an opportunity out there in cryptocurrency that matches any individual’s skills and desires if one searches hard enough. If you can’t find what you want, find a way to build it! That is what iNodez was born out of. I saw a need for an easier and more affordable way for people to contribute to a project that I believed in, so we built iNodez to fill the need. Now more than ever, Crypto needs more people to get involved and ensure that this technology is not controlled by the hands of a few elite developer groups. When it comes to crypto, the time to get involved is now (or better yet — yesterday!).
🔥Where do you see the blockchain, cryptocurrency and the decentralisation space going in the next 5 to 10 years?
MR: I believe that within 5–10 years cryptocurrency and blockchain technology will be integrated into mainstream commerce and finance to the point that almost every person on the planet will transact on some decentralized ledger network in their daily life (whether they are aware of it or not).
I believe that future use cases will continue to be developed and this emerging technology will be applied in new and innovative ways over the next decade. Everything from machine learning to buying groceries will be impacted by the expansion of decentralization and the increase of interconnected digital networks sharing information that will be analyzed in real-time by processors all over the globe.
🔥Where can we go to learn more?
MR: The best place you can go to learn more about iNodez is the main website and official discord server!
🔥Thank you, Michael!
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