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$STRONG nodes – earn passive income with crypto – StrongBlock

Photo by Kate Trysh on Unsplash

$STRONG nodes – earn passive income with crypto – StrongBlock

I might just have found my 3rd passive income stream* in STRONG nodes and I’m delighted as noding is something I wanted to get into back in 2018 but it never quite happened!

*Update: Strong is in My Top 3 Passive Income Opportunities – read more here!

And now, it’s even better for #vanlife as Strongblock operate Node as a Service or ‘NaaS’, which means the hardware is in the cloud, so there’s no hardware to contend with or maintain and no local power supply is required…yey! Perfect for van life 🙂

Firstly, unlike some of the other passive income streams I’ve covered, this opportunity is probably more suited to those who already have experience in cryptocurrency as buying Strong tokens, creating your node and managing it is a little more technical and needs decent understanding of transferring coins, wallet security etc. However, I’ll try to keep this post layman and ‘low tech’ for those who are curious.

Think it sounds too much effort? Wait!

What if I were to tell you that that wee node could be earning you +20% per month?

Interested? Let’s get started.

What is StrongBlock?

Strongblock develops blockchain platforms and protocols and aims to transform the way blockchain networks reward the nodes that secure and support them. They provide an easy-to-use Node as a Service (NaaS) tool that enables any non-technical person to launch a blockchain-compliant node in seconds and be rewarded for running them.

The first blockchain blockchain StrongBlock support is Ethereum.

What is a node? (simple overview)

blockchain nodes

Blockchains (cryptocurrencies are blockchains) require nodes to operate. A node is a piece of software that connects to other nodes in the blockchain to create a network. Nodes are where data is stored, received and transmitted. They are crucial to network security and integrity.

Nodes enforce the rules of the protocol. All blockchain transactions must pass though nodes as they validate the transactions via a ‘consensus mechanism’, aka algorithm (mathematical calculations). Multiple nodes must agree that the transaction is legitimate by ‘confirmation’ before it is agreed to be final. Some nodes contain a full transaction history.

Each blockchain has a different protocol or way of validating transactions eg the Bitcoin protocol is different to that of Ethereum and has a different means of ‘consensus’. Thus what a node actually does in any given blockchain protocol will vary, however one thing remains; a node requires a piece of hardware to run on (just like any other piece of software or program).

What are Strong nodes?

Strong nodes support the Ethereum network and reward nodes with a ‘Node Universal Basic Income’ (NUBI) on a ‘per Ethereum block’ basis for contributing to maintaining the network.

Strong nodes Strongblock logo

Strong nodes are operated ‘Node as a Service’ and thus require no hardware (ie. StrongBlock take care of the resources and technical stuff for a small monthly fee). Whilst currently only Ethereum is supported, StrongBlock’s goal is to be blockchain-agnostic and more protocols are coming soon.

It should be noted that Strong nodes are ‘private nodes’ for which demand has been growing. A solid network of nodes is required in order to provide Blockchain as a Service (BaaS), the newest of the ‘as a Service’ services that is likely to explode over the coming years (Markets and Markets expect BaaS to grow at an insane CAGR of 90.1%!), similar to the explosive growth of Infrastructure as a Service (IaaS) and Software as a Service (SaaS) over the past decade. And ‘BaaS’ is exactly where StrongBlock are headed.

What are the StrongBlock / Strong tokenomics?

Strong is an ERC-20 token. The max supply of $STRONG is 528,886. You can read more about the Strong tokenomics here on Medium and see the latest circulating supply on CoinGeko (approx 25% is circulating at time of writing, mid June 2021).

Relative to other token/supply, half a million is pretty damn low. For that reason (and many others!), I feel the price of STRONG (currently around $200USD) is fairly stable and has a high likelihood to increase. Note that STRONG has already experienced explosive growth this year – it was only $20 in January and six months later was more than $200.

How much can I earn from Strong nodes?

The current reward for operating a Strong node is 0.1 STRONG per 7,000 blocks. This works out at 0.092 STRONG per day. Assuming Strong holds it’s value and rewards remain the same, that works out at about 27% per month.

BUT WAIT “hold yer horses” as my ma would say.

The math ain’t that simple…and the variables change.

Firstly, you have monthly NaaS fees of $15 (+ETH transaction fees) per node.

Then, you have ETH transaction fees every time you ‘claim’ your STRONG or create a Strong Node or stake an NFT…all of which vary based on the ETH gas fees at the time of the transaction 🤯. That, plus the volatile nature of cryptocurrency makes it pretty difficult to calculate your return, especially in fiat currency.

I’ll do some example math here later, but let’s just say that if Strong value remains static, the rewards are currently excellent and you should return your investment in around 15 weeks or less than 3.5 months.

However, the value of $STRONG can go up….and down. And, the rewards may (will!) change

If the rewards were to be cut in half (and price remained stable), then it would take twice as long to recoup your investment — monthly it would look more like 13% return (minus those fees we mentioned). Be sure to factor that into your risk calculations. Read on for information on ‘halving’ of rewards.

How much does a Strong node cost?

A Strong node costs 10 STRONG tokens + a monthly service / maintenance fee of $14.95 USD (paid in ETH and +ETH transaction fees) to operate and maintain the node. No hardware or maintenance is required – that’s what you’re paying the $14.95 for.

Strong (STRONG)

$ 224.40

Whatever that price is above, X10, + $14.95 and +{???} for ETH fees.

It’s better to have more ETH than less eg $100 is usually good for one, but totally depends on gas. You shouldn’t need $100 unless gas is crazy – check out https://www.gasnow.org/ for the latest Gwei, however MetaMask can be a bit buggy and likes you to have a decent amount. It cost me about $20 to create a node (inc the 1 month maintain fee and gas) when Gwei was around 10.

Not sure what Gwei is? Check out this post!

Where do I buy Strong tokens?

You can buy Strong tokens on Uniswap DEX (plus various other aggregators) and KuCoin, Gate and Hoo exchanges.

Uniswap has by far the most liquidity and of the CEXs, Kucoin has most. Check withdrawal fees — last time I checked with Kucoin it was 0.1 STRONG….so you’d need to buy at least 10.1 STRONG to withdraw.

How much do Strong tokens cost?

Like other cryptocurrencies, the price of Strong is volatile and can change (it went from $20 to $200 during the first six months of 2021).

The latest price should be displayed a few questions above. If you can’t see it, try CoinGeko.

Is Strong a passive income crypto?

Yes. Unlike many other cryptocurrencies, Strong has the potential to be an excellent passive income stream. You essentially ‘pay’ 10 STRONG for your node and earn 0.09 STRONG per node, per day* (*see next question!). You can claim as often as you wish however you will need to take into consideration the ETH gas fees associated ie. it is not economical to withdraw daily, and mostly it is not economical to claim weekly. All depends on gas fees.

Note that there is a monthly NaaS maintenance/rental fee of $15 and Ethereum gas fees to take into consideration.

What are Strong Node rewards?

The current Strong Node rewards are 0.1 STRONG per 7,000 blocks…which is about 0.09 per 24hrs (as there are approx 6,500 blocks per 24hr). They start immediately after your node is created.

The rewards for Strong Nodes are NOT guaranteed and will reduce at some point. The reason they are so good is to incentivise early node creators.

What is a ‘halving’ with regards Strong nodes?

When people talk about a ‘halving’, they are referring to a reduction in the STRONG node rewards – the Universal Basic Income’ (NUBI) provided. It does not necessarily have to be a 50% reduction.

The last ‘halving’ of rewards was in April 2021 and it was a 50% reduction. Several weeks notice was provided ahead of the halving.

Update: In July, there was almost a halving without warning; it was announced suddenly (and badly!), however, the community protested and StrongBlock executive team listened – the halving has not happened and communication has since improved 1000% — the StrongBlock CEO, David Moss has held regular AMA (ask me anything) sessions with the community on Telegram.

We are waiting for news regarding what the new ‘halving’ solution might be (we all know the current rewards are not sustainable long term and not guaranteed).

How passive is Strong as an income source?

Strong is very passive, but not 100%. The main reason is that the monthly server rental/maintenance needs to be paid. If you do not pay the fee past its due date block, you cannot claim rewards. And, if you have not paid after a set period of time – currently 30 days (another 210,000 blocks), your node will be removed by the smart contract.

#byebye little node 😢

You can pay up to 3 months in advance by clicking on the ‘pay fees’ button 3 times (each time you need to pay individually and confirm via MetaMask). They also have a ‘Pay All Node Fees’ button, which enables you to do the same. Ideally you’ll want all your node fees on a similar timeframe before doing this.

How do I create a Strong node?

You’ll need to have your 10 STRONG tokens in a wallet with MetaMask plus enough ETH to cover $15 first month maintenance plus enough ETH to cover all gas fees. It’s difficult to say exactly how much that is – check gas at gasnow.org.

As a rough example, it cost me around $20 to create a node when gas was around 10 Gwei. However, you will need significantly more ETH in your MetaMask otherwise the transaction will probably fail (I always have minimum $100).

Then go to https://app.strongblock.com/ and click ‘Create Node’.

Be sure the wallet you create it in is secure as currently nodes cannot be transferred to other wallet(s) – see: Are there any other risks?. If in doubt, create a new wallet for your nodes (and ideally use a hardware such as Ledger to manage it). Invest some time learning about wallet security!

What about ETH and gas fees?

As already mentioned, make sure you have enough ETH in your wallet to cover gas fees. It’s a real kicker if you are ‘tight’ with funds, only to realise your transaction has failed and the gas fees taken. Best to be safe and have that little bit extra!

Always check the gas fees first so there are no nasty surprises! Try gasnow.org &/or ethereumprice.org/gas to check the latest Ethereum network fees and how they compare.

If the ETH gas fees displayed in MetaMask look extortionate, double check you have a decent amount of ETH in your wallet (this is a known ‘bug’ with MetaMask/gas fees – if you don’t have enough ETH, an extremely high fee can be displayed. Adding more ETH to the wallet usually sorts it).

How long does it take to create a Strong node?

Clicking the buttons and confirming the transaction on MetaMask only takes a moment, however it can take 30 minutes before your Strong node shows up.

Can I use my mobile to create a Strong node?

Not yet – use a desktop browser such as Chrome or Brave.

Can I sell my Strong node?

Nope. At this time there is no way to transfer a Strong node from one wallet to another.

Can I get a refund for my Strong node?

Nope. Once you contribute those 10 Strong, they are gone.

And why would you want a refund anyway? Are you crazy?!

How do I earn money from a Strong node?

You claim the $STRONG tokens that your node generates and sell them.

Note that clicking the ‘Claim’ button will claim for ALL nodes. You will need ETH gas each time you claim AND for EVERY node — this is why it is not economical to claim regularly eg daily.

Example; If you have 4 nodes and click ‘claim’, there will be 4 X gas fees to pay. Make sure you have enough ETH to cover gas!

What are the Strong node tax implications?

I have not yet consulted with a tax advisor (and the implications will vary form country to country) however it seems like it will probably be 100% income tax. When you buy a Strong Node, you currently cannot sell it, therefore it is not an ‘asset’ and thus a node purchase would be seen as a business expense. Then, I’m guessing the rewards would be seen as ‘earnings/income’….

So I’m guessing it will be ‘income – business expenses’ ie. ‘rewards – node cost – maintenance fees – gas fees – other business expenses’. It would be nice if some were capital gains.

However, Strong is very new — their NaaS have only existed since December 2020 — and so there is a chance things may change. From Telegram, it is clear that many members would like the ability to sell their node as an asset, in which case that could change things and possibly be subject to capital gains tax.

Also, nodes and all these new opportunities are very new. It’s not clear yet in all tax jurisdictions how they should be treated.

For crypto tax tracking I’ve used Cointracking since 2018. It’s not as pretty as some of the new tools, however it works really well. If you use this link, you’ll get 10% off (there’s also a healthy free use allowance).

I’ve only been with Strong since beginning of June 2021 so there is no tax implication for me in the near future (I’m in the UK and tax year runs April-April). I’ll update this when I speak to an advisor, hopefully around September 2021.

What are Strong NFTs?

Think of an NFT as a ‘boost’ or ‘powerup’ within a game. The Strong bronze NFT provides a 0.0125 ‘boost’ to the rewards of one node. This might not sound like much, however it is fixed (ie that ‘0.0125’ reward will never change, even if the general ‘0.1’ rewards are reduced) alongside other benefits that are not yet specified but include early access to create new nodes on new protocols.

It has also been stated that at some point, probably mid-late summer 2021, a NFT will be required in order to make any Strong Node.

At the moment, the value of an NFT is fairly speculative. You can view information on NFTs here: https://nfts.strongblock.com

Sidenote: Strong NFTs are assets and so would be subject to capital gains tax (CGT) if disposed of (sold!).

Where can I buy a Strong Bronze NFT?

All the Bronze Strong NFTs are currently in circulation and therefore you can only buy them in the secondary market; OpenSea.

Bronze NFTs are the cheapest and have seen high demand. You can buy one here: https://opensea.io/collection/strongblock-nfts – just make sure the item you purchase has a blue tick of authenticity and purchase it with the same wallet that you use to create your nodes.

How do I add an NFT to my Strong node?

The NFT needs to be in your node-connected wallet. Then simply click on one of your nodes, a popup will appear and in it an option to stake NFT. Stake your NFT and do the various confirmations in MetaMask.

Be sure you have ETH in your wallet and check the gas fees first via gasnow.org &/or ethereumprice.org/gas.

Help! My node(s) are not loading!

Hard-refresh the page a few times. If that doesn’t work, switch MetaMask networks and then back to Ethereum and hard refresh again.

If that fails, logout of MetaMask, hard refresh the https://app.strongblock.com page and re-connect Metamask. If that doesn’t work, go make a coffee and then try again (it’s never got that far for me – usually a few hard refreshes &/or switching MetaMask network back & forth does the trick!).

What is the StrongBlock business model? How do they make money?

Like many blockchain companies, StrongBlock is a startup, still in its infancy. It has been operating since 2018 and their NaaS launched December 2020.

StrongBlock is currently building both it’s technology AND community of node operators in order to be able offer a decentralized BaaS (hey, that’s a pretty cool thing to say when asked what you do for a living at a dinner party; “I’m a Strong node operator…”). Anyway…

During this proof of concept and community building/early adoption phase, StrongBlock rewards mostly come from STRONG itself — when you click create a node, you will see the breakdown of where that 10 $STRONG go, and currently 60% goes to the node rewards pool.

However, StrongBlock’s ultimate business model is BaaS — to offer blockchain-agnostic infrastructure services, including ‘nodes-as-a-service’ node rental. In addition, they are democratizing the ability to participate and earn to non-technical people, like myself, by simplifying the node creation and management process through their Node as a Service (NaaS) offering.

BaaS - blockchain as a service

Image Source: A Review of Blockchain in Internet of Things and AI, Atlam et al 2020

A similar BaaS business model is Infura, who are centralized operate only on Ethereum (StrongBlock aim to be protocol-agnostic and decentralized).

The first public commercial partnership is with Sentinel, a decentralised VPN (Virtual Private Network) that operate on the Cosmos blockchain and expected mid-late 2021. You can read the Sentinel announcement here.

How risky is Strong?

Until StrongBlock prove their concept, ability and business model, any investment in Strong should be deemed ‘high risk’ with the potential of ‘high reward’.

This is the same for any startup, however it comes with the added ooomph of crypto and its notorious volatility. This only serves to multiply the ‘high-risk, high-reward’ nature of investing in Strong nodes.

This is not an anonymous team. The senior executives are experienced blockchain veterans. You can view the Linkedin profile of David Moss, StrongBlock CEO here, CTO Brian Abramson here and CPO (Chief Product Officer) Corey Lederer here. Their big crypto background is in Block.one aka $EOS. Check out their profiles.

If you’re already investing in cryptocurrency, I’d say that Strong is a much lower risk relative to most other small-cap cryptos (there are +8,000 listed on CoinGeko!).

Strong has an experienced team, working product, highly active community and operating in BaaS, an industry undergoing extreme growth. In addition, you have the potential do de-risk quickly – assuming you create a node and withdraw, then sell everything and there is no change in $STRONG price and no change in rewards, you could return around 30% of your investment within a month (ie de-risk).

What about the risk of Strong ‘halving’ rewards?

This is one aspect that is a risk, and it will happen at some point (the last halving happened in April 2021 and several week’s notice was given).

I think the main concern people have is that there is no published roadmap or tokenomics regarding reduction in Strong node rewards. ie. we don’t know how this is determined, all we know is that it involves many factors and is required for sustainability. A increase in price (which is likely before any halving) should offset a significant proportion of any ‘loss’.

It should also be remembered that the current return is phenomenally generous and designed to incentivise and grow the community of node operators, hence over time reductions are required. However, there is good news – as Strong moves into the commercialization phase, these new protocols and nodes will provide rewards in a mix of Strong and the native token of the partner which will reduce the need for halving.

And, one final thing to remember is that STRONG is required to create nodes…and StrongBlock need nodes. It’s in their best interest to keep decent rewards so operators keep creating new nodes. All things considered (even if Strong rewards halved right now!), these nodes still offer a cracking return which would be hard to beat!

  • 24th July update: there was a ‘zero-warning’ halving announced last week (rewards reduced). However, after community feedback, StrongBlock revoked the halving and are looking at other options. We do not yet have any further information. This was bad communication by StrongBlock (due to the zero notice) however to their credit, they reacted to the community feedback and we look forward to hearing how they plan to manage NUBI reductions going forward.

Are there any other risks?

Yes – you MUST ensure your MetaMask is secure ie. your seedphrase is NOT stored on your device(s).

Obviously you should do this anyway, however it is more important with Strong Nodes because your node is ‘in’ your wallet and currently there is no way to transfer a node to another wallet. Essentially this means if your wallet gets hacked, your node rewards (alongside anything else in the wallet) is gone.

So make sure that MetaMask and wallet is secure. Consider additional hardware security to access it such as a Ledger.

What is my Strong Nodes plan/strategy?

My plan is to use Hyperfund withdrawals to create 12-14 Strong nodes ASAP. This should return around 1 STRONG per day at current rewards rate, including fees AND enough to cover any potential tax.

Similar to what I did with Hyperfund and Yieldnodes, I’ll then start pulling out some profit in order to de-risk my position, before compounding again (ie. buying more nodes with rewards) and/or looking at diversification into other opportunities.

How long have I been using Strong Nodes?

I only created my first node in the first week of June 2021 and now have a few nodes as a means of diversifying my existing passive income streams, HyperFund and YieldNodes which I’ve been with since December 2020 (and am very pleased with their results).

Overall, I’m extremely enthusiastic about StrongBlock and excited to see what happens over the coming months and years.

So I’m fairly new to Strong, however I’m loving it and based on the use-case, CEO, community and growth it seems like a strong (🤣 ) project with long-term potential that could be a total game-changer for blockchain….and potentially a great investment – Markets and Markets report that BaaS is expected to grow at a CAGR of 90.1% until 2023. (That’s massive!).

Where can I learn more about Strong?

UPDATE: Strong Nodes are in My Top 3 Passive Income Opportunities – read more here!

Disclaimer: As with everything on this site, this article is for informational purposes only and is not investment advice. I simply share my experiences and my opinions for information. I am not a financial adviser and I am not providing investment advice. Investing in cryptocurrency is high risk and these opportunities exist in new, high risk and unregulated markets. Please do your own research and due diligence; do not blindly follow anyone!

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