Running A Tezos Node Recently Earned A Baker 6,000 tez For Baking A Block
Recently, a baker got rewarded 6,091 tez in transaction fees on top of the basic block rewards and bonus. Transaction fees are paid by users that insist on their transaction to be included in the next block.
Image Credits: From The Tezos.com Illustration Library.
If you validate transactions and blocks for a specific blockchain, you “run a node” or in Tezos terms, you are a Baker. You can also run a Tezos node without baking.
With baking, it basically means that you run a program on a dedicated computer or other device like a Raspberry Pi, 24/7. For this, you earn cryptocurrency as a reward.
Many people often ask if it’s worth setting up a Baker.
You’ll earn block rewards and a percentage of the staking rewards of your delegators, but is it worth the extra trouble to set up and maintain a node?
With the current growth in activity and popular events, chances increase for a big payout for Bakers.
Recently, a baker got rewarded 6,091 tez in transaction fees on top of the basic block rewards and bonus.
Transaction fees are paid by users that insist on their transaction to be included in the next block.
Adding a bigger fee results in the fact that your transaction is likely to get priority and will get included in the next block. The fees go directly to the Baker that validated the block.
You can manually adjust transaction fees using most Tezos wallets and as activity on the Tezos blockchain grows, there will be more events that cause people to increase their transaction fee.
Over 6,000 tez in fees for a single block is an exception, but it is happening more and more often that blocks pay quite well. The basic payoff is about 20 tez per block.
Over 600 blocks so far carried a reward of over 100 tez. Close to 90 blocks carried over 500 tez in rewards and close to 30 blocks carried over 1,000 tez.
The top ten blocks with the biggest amount of fees all carry over 2,700 tez. The biggest part of these events took place in the past 12 months.
Still, these are rare events, but it is possible for any baker to get lucky and bake such a block.
Why increase fees?
When you participate in a token sale or NFT sale, you can decide to manually adjust the gas fee to ensure your transaction will go through.
This is something you’d do if you expect the sale to be so popular that there will be more transactions than the network can handle.
Is this a necessary practice? Only if the network can’t handle the transaction load on a certain moment.
Since Tezos upgrades a lot and thus evolves fast, chances of overcapacity are less and less likely because the protocol improves and with that the amount of transactions that the network can handle per second (tps) goes up.
How can you set up your own baker?
You need a medium performance type computer or laptop, but baking on a Raspberry Pi works too.
Additionally you need a Ledger Nano S. It’s also recommended to have a battery backup in case of power outage.
It is possible to be able to get your hardware for around $1,500.
To be able to start baking you also need a minimum of 6,000 tez in your wallet.
This is called a “full roll” (another option is to have 1000 tez in your wallet and have another 5000 tez delegated to you).
There are several services and community members that can guide you or help set up your baker.
Both have some documentation on their websites and both have social media channels where you can ask questions on how to get you started.
Canadian Bakin’ has a guide on YouTube that can help give you an idea how to set up a baker using BakeBuddy.
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