Masternode and ZenCash SecureNode SuperNode Setup Service

Masternodes are incredibly popular right now.  There has been an explosion in the number of masternode projects, and a kind of nuclear arms race to attract new buyers with high ROI.  Many of the new coins start out with 1000% ROI or higher.  This means that you could get your initial investment back within 2 months (if the price holds).

But setting up a masternode often requires a bit of Linux know how.  The most popular set up is called a “cold wallet” where the coins that are kept as collateral live in your desktop wallet (preferably encrypted).  Then a Linux Virtual Private Server (VPS) is set up that connects to the collateral and provide 24/7 masternode status regardless of whether your local wallet is open or connected to the internet.

Most of the masternode coins provide instructions on how to set up your Linux VPS. If you’re reasonably good at following directions, AND the guide is set up well, then it’s not too hard to figure it out yourself.  However, many of the newer coins have incredibly bad guides.

  • They skip steps.
  • There are spaces where there shouldn’t be, and no spaces where there should be.
  • Commands that belong on one line are split, and commands that should be two separate commands are joined together.
  • Sometimes commands are missing altogether.

Some of the projects have nifty install scripts, so all you have to do is download an install file and run it.  Qbic is an example of this, however, the script doesn’t fully work, and will leave you with a broken installation.

That’s where I come in.  I’ve installed more than 30 masternodes from more than a dozen different coins.  My first client had been trying to set up his Goa masternode unsuccsesfully for 6 days.  He was losing $225 a day!!!

Here are the services I provide:

In addition to setting up the Masternode VPS, I also walk you through the process of setting up your local wallet and troubleshooting any issues that come up.

All prices are quoted in USD and payable in LTC, ETH, or BTC at the current market rate.

Masternode (setup only)

  • You supply the VPS
  • Cost is $75 per coin
  • Discount of $25 per coin if ordering multiple at the same time.
  • One week of troubleshooting is included.
  • I will show you how to maintain the VPS and update the server.

Masternode hosting (setup and 1 year of hosting)

  • Setup costs are the same as above (same as above)
  • One year of VPS hosting and server updates is $140
  • Note, if you host multiple coins with me, you may be able to host 3-4 coins on the same VPS.  The fee to host an additional coin on the same VPS is $60.
  • Subscriptions are renewable

Discount example 1: Masternode hosting for 2 coins on the same VPS

  • Setup costs $50 x 2 = 100
  • Hosting cost $140 + $60 = 200

Discount example 2: Masternode hosting for 3 coins on the same VPS

  • Setup costs $50 x 3 = 150
  • Hosting cost $140 + $60 + 60 = 260

HoriZen (formerly ZenCash) Super/Secure Nodes

Horizen (formerly ZenCash) is my favorite masternode type project.  It is an incentive-driven application platform with optional zk-SNARK based privacy features that aims to provide everyone with complete control of their digital footprint. Launched in May 2017 (no ICO and no pre-mine), the platform is said to enable real-life use cases beyond the ZEN currency, including the ability to privately chat with others, publish information and go anywhere on the web with complete privacy.

As of Fall 2019, the team is reportedly working towards releasing the Horizen SDK which would allow developers and enterprises to build what they call “an unbounded set of applications, products and services on top of the Horizen technology platform which is a truly decentralized side-chain based system powered by Horizen’s globally distributed multi-tier node network.”

Horizen Secureand Supernodes  Nodes are quite a bit more involved than Masternodes both in set up and VPS requirements.

  • If you supply the VPS
  • Cost is $100 per Secure Node
  • One week of troubleshooting is included.
  • I will show you how to maintain the VPS and update the server.

HoriZen Secure Node hosting (setup and 1 year of hosting)

  • SuperNode: One year of VPS hosting and server updates is $232
  • SecureNode: Due to automation and economies of scale, I can offer Secure Node hosting including set up and maintenance for $60 per node.  (Yes I know this is less than set up only.  It’s a shook up crazy world.
  • Super/Secure Nodes cannot share a VPS with another coin.
  • Subscriptions are renewable

 Frequently asked questions


What servers do you use?

I generally use OVH.com servers.  Their VPS SSD 1 for masternodes and VPS SSD2 for secure nodes.  I use Contabo for Super Nodes.

Will my coins be safe?

The coins will always remain in your local wallet.  HOWEVER,  I recommend that

  • As soon as you receive the coins that you make a back up of your wallet.
  • Store the back up in a safe place (from theft, fire, and water)
  • Encrypt your wallet and DON’T lose the password.

It’s far more likely that you lose your coins due to negligence or your computer crashing than to being hacked. Please, for the love of God, back up your wallet and don’t lose the password.

How long have you been doing this?

I set up my first mastenode coin for myself and on December 28, 2017 and set up my first client a few days later. I have been using Linux since 2003. I have been running Linux VPSes since 2011.

What happens if you decide to quit this business?

If I decide to stop providing this service,

  • All hosted clients will receive their full year’s subscription.
  • OVH allows transfer of a VPS to another account.  A month before the expiration, I will help migrate all client VPS to their own accounts.
How do we get started?

If you haven’t filled out the sign up form yet, that’s a great place to start Once we’ve talked/chatted and both agree to the work to be done, then I’ll need

  • Your payment and the txID (so I credit the right person)
  • Your masternodeprivkey (In your local wallet, go to Debug Console and type “masternode genkey”
  • If you’re providing the VPS, I’ll need the IP address and root password.
What's involved on my (the client's) end?

You’ll need to

  1. Buy the coins
  2. Transfer them to your local wallet.
  3. Create a new address and send the EXACT amount of collateral to the wallet.
  4. Wait for at least one confirmation
  5. Go to the Debug console in the wallet.
  6. Type “masternode genkey”
  7. Type “masternode outputs”
  8. Copy all of the codes generated and save them in a text file.
  9. I will walk you though what to do with them.
What's the difference between a Zencash Securenode and a Masternode?

Masternodes mostly speed up network transactions and sometimes vote on the direction of the project.  Secure nodes receive daily challenges where they receive and send a shielded (private) transaction each day.  This provides the network with thousands of private transactions making it much harder to track.  A secure node needs needs more memory than the typical masternode needs in order to run the challenges.  There is also a performance aspect to secure nodes and super nodes, in that the node must complete the challenge under a time limit. 

Secure nodes and Super Nodes are also paid differently than a masternode.  Masternodes are paid (usually) from a lottery system based on a list of all masternodes running at a given time.  Once a masternode has received its rewards, it goes to the bottom of the list.  Horizen nodes are based on daily uptime.  A nodes that is up for ~93% of the day is paid for that day.  Payments are manually reviewed and paid out once a week.

Additional Horizen Resources:
Horizen Website – https://horizen.global
Horizen Academy – https://academy.horizen.global/
Horizen Discord – https://discord.gg/SuaMBTb
Horizen Blog – https://blog.horizen.global
Horizen Github – https://github.com/ZencashOfficial
Horizen Forum – https://forum.horizen.global/
Horizen Twitter – https://twitter.com/horizenglobal
Horizen Telegram –https://t.me/horizencommunity
Horizen on Bitcointalk – https://bitcointalk.org/index.php?topic=2047435.0
Horizen YouTube Channel – https://www.youtube.com/c/Horizen/
Horizen Facebook Page – https://www.facebook.com/horizenglobal/

What is the best way to get in touch with you?

Telegram and Discord are probably the best ways to get in touch with me. My username on Telegram is @patrokov. I have a Discord Server for the Masternode Service.  My username is patrokov#7056.  If you can’t start a DM with me in Discord, it’s most likely because we are not on the same servers. I can also Skype (same username) but Skype doesn’t alert me when I get a message, so it’s better to use a different method unless we pre-arrange a meeting or chat. E-mail also works.  You can fill out the form below, and I will get in touch with you. 

When do you do this work?

I mostly do the work in the evenings after work and on weekends.

Masternode/SuperNode/SecureNode Setup Service Request

Masternode/SuperNode/SecureNode Setup Service Request

You will receive an e-mail copy of this form.
(one per line if you have multiple, if you want more masternode of the same coin, then put x2,x3,x4 etc. after the name of the coin)

Family Photos

Family Photos

Family Photos – 2018 – Palm Beach Island

We got family photos taken recently  here are the photos!!!!

How to Secure a Masternode VPS

Now that I’ve helped several people with their masternodes, I’ve noticed that many people are just copying and pasting the commands from an online setup guide.  Unfortunately, a lot of the guides gloss over important things like server security.  The video below shows how to secure a Linux VPS.  All of the commands in the video are found below it, so you can just copy and paste them…ironic isn’t it?

Steps in Securing a Linux VPS for a masternode

As root on the VPS:

adduser crypto
usermod -aG sudo crypto
su – crypto
sudo apt-get update

now back on your computer
Mac or Linux

ssh-copy-id crypto@ip.address

#Windows
#copy the contents of id_pub.ppk
#paste it into .ssh/authorized_keys on the vps

mkdir .ssh
nano .ssh/authorized_keys
chmod 660 .ssh/authorized_keys

Now test your new keys
Leave the first putty window open
Open a NEW session and choose your private key from the auth
Save the session
Did it work? Yay!!!

Now let’s disable password and root logins:
you could sudo nano /etc/ssh/sshd_config
but that’s not cool. Let’s do it with sed!

sudo sed -i ‘s/PasswordAuthentication yes/PasswordAuthentication no/’ /etc/ssh/sshd_config
sudo sed -i ‘s/PermitRootLogin yes/PermitRootLogin no/’ /etc/ssh/sshd_config

#restart ssh server

sudo service sshd restart

Now test your settings
Open a new session and try to log in with root@ip.address
It shouldn’t let you
Now try to login as your username without using the key, and it shouldn’t let you.

You’re half way there, livin on a prayer!!

Now let’s install a simple firewall
We’ll lock down all the ports except the one needed by SSH and your coin (this will change depending on your coin).
We’ll limit the number of SSH connections to help prevent brute force attacks

sudo apt-get install ufw -y
sudo ufw allow ssh/tcp
sudo ufw limit ssh/tcp
sudo ufw allow 9999/tcp #replace the number with the port of your coin
sudo ufw allow 8888/tcp #you can open additonal ports if running more coins
sudo ufw logging on
sudo ufw enable
sudo ufw status

And now let’s install fail2ban

sudo apt -y install fail2ban
sudo systemctl enable fail2ban
sudo systemctl start fail2ban

Own Bitcoin in your ROTH IRA – Step by Step

Own Bitcoin in your ROTH IRA – Step by Step

So you’re convinced.  Bitcoin and cryptocurrency are the wave of the future (or at least you hope to make a fortune trading the swings), but the new tax law that you’re supposed to calculate your gain and pay taxes on every trade is cramping your style.  Well, you could avoid paying taxes if you owned and traded the cryptocurrency inside of a tax deferred retirement account (or better yet, a Roth IRA so you never pay taxes on the gains).

But doing so is a bit complicated.  For years I had heard of “self directed” IRAs that allowed you to invest in real estate (but my IRA didn’t have enough money to do that).  Later on, I learned about how you could invest in gold  through an IRA or the IRA could even start its own LLC that you manage (also known as a checkbook IRA).   But I never had a reason to want to do so.

Enter Cryptocurrency.  No matter whether you’re HODLing, trading, or running masternodes, the potential upside is enormous, and you don’t need a huge amount of money to get started.  Now there’s a reason to put that arcane knowledge to use.  What follows below are the things I’ve learned by doing this process myself.

Overview of the IRA/LLC process

  1. First you’ll need a self directed IRA with a trust company that allows IRA/LLCs also known as checkbook IRAs.  So find one with minimal fees that you trust, and open an account.
  2. Find an attorney who specializes in this sort of thing to create your LLC.
  3. Once your LLC is created you need
    1. Request a bank check sent to your house from the IRA in your LLCs name
    2. Open a bank account
  4. Open a Coinbase/Gdax account in your business’ name (and trading accounts on exchanges like Binance, and Bittrex, and Kucoin (affiliate links on Coinbase and Binance)).
  5. Wire the money from the bank account to Gdax.
  6. Trade your heart out.

Step 1: The first step is to open a self directed IRA

You’ll need to open a self directed IRA with a custodian that allows IRA/LLCs.  My personal preferences are:

  1. Custodian has an online sign up (I HATE paper forms)
  2. Low fees
  3. Allows you to pay maintenance fees with a credit card

Due to anti-kickback laws, no one you deal with can “recommend” a service to you.  So if you already selected an attorney, they’ can’t recommend an IRA custodian, and vice versa.  But perhaps if you worded your question in the form of “which companies are the easiest to work with?” they might be able to answer.

Based on these two criteria, I selected Kingdom Trust, but in their 2018 updated fee schedule it looks like they eliminated the IRA/LLC option, and the regular self directed IRA option has a percent of portfolio based fee, which simply doesn’t work for me.

They’re pretty much all going to charge an annual (or more often) maintenance fee, check fee, wire fee.  They often charge per “asset” within the IRA, but the only asset should be the LLC you’re going to form.

Action steps:

  • Fill out the Application for new account form
  • You need to fund the account in some way.  Ideally a large chunk, like say $5000 or more, but whatever you can do that they will accept will work.

Step 2: Have an attorney form your LLC

You can begin this step while you’re waiting for the IRA to fund.  I consulted with two attorneys (Mat Sorensen and Nick Spradlin).  I ended up going with Nick Spradlin mainly for the lower price and because he has offices in Florida.  This step took about two weeks.

Note: Technically your IRA owns the LLC, so the IRA should pay the attorney, not you.

You WILL need a Tax Id number for your LLC, so it’s easier to pay the attorney to file it for you than for you to do it yourself (IMO).  It’s also easiest to name your LLC: FirstName LastName IRA LLC.  That way when you go to the bank, they immediately see the relationship.  You can also pay for a DBA (doing business as fictitious name) but I didn’t opt to.  I highly recommend using an “e-book” rather than a traditional printed binder.

You can also pay for the attorney to be your registered agent within the state of registration (which should be your state of residence).  This makes a lot of sense when you’re investing in real estate and there may be legal issues with subcontractors or tenants, but I’m not sure it’s such a great deal if you’re just buying Bitcoin.

A couple weeks later you’ll get an e-mail with several things.

  • Articles of Incorporation where the attorney filed your LLC with the State
  • An LLC seal
  • An LLC membership certificate
  • Your Tax ID number
  • And your LLC Operating Agreement, Minutes, and Ledger

Step 2b: What do you do with all this LLC stuff?

  1. First you need apply your company seal to the Membership Certificate.  There are instructions on how to do it using Adobe Acrobat.
  2. Then print out the Certificate and sign it.
  3. Print the signature pages from the Operating Agreement and Minutes and sign them.  Scan everything back together and assemble the documents into one big file. (Or print them all and then just scan them together.)
  4. Send them all to your IRA Custodian (see Step 3 below)

Step 3: Tell your IRA Custodian to invest in your IRA/LLC

This will likely involve several forms.  For the Custodian that chose, I had to fill out an LLC agreement form where I told them the name of my LLC and provided all of the documents above, and then an Investment Authorization “Kit” (series of forms) authorizing the IRA Custodian to “invest” (send money) to the LLC.  At this time, the safest thing to do is request a check made out to your LLC’s name sent to your address.

The reason for this is that you’ll need to have some money to start a bank account.  None of the local banks I talked to would let me start the account with a zero balance and then wire the money in.  The alternative would be to deposit the minimum with your own money, wire the funds from the IRA, and then withdraw the minimum deposit once the wire goes through, but the IRS might look down on that, so better safe than sorry.

Some tips:

Bank Secrecy Act (Currency and Foreign Transactions Reporting Act)

As part of opening the bank account, they’ll ask you a series of questions required by the Secrecy in Banking act.  One of them includes whether you are creating or exchanging virtual or digital currency.  To the best of my reading, the answer is no.  (If you answer yes, they won’t let you open the account by the way.)  DISCLAIMER: I am not an attorney, nor do I play one on TV, nor did I sleep in a Holiday Inn last night.  This is not advice nor a legal opinion.  The best that I can see is that if you’re in the business of exchanging (like Bittrex or Coinbase) or you’re going to be creating a cryptocurrency (like Ripple) then you probably should say yes.  But if you’re just buying, holding, and selling cryptocurrency, you should be okay saying no.

Bank Account: LLC Owner

Now this one is tricksey.  Technically the owner of the LLC is something like “IRA Company Name Custodian FBO Your Name IRA Account XXXXXXX.”  At first I tried opening an account with CapitalOne Spark Business because there’s no minimum balance, and they don’t charge your for the first 5 outgoing wires.  (Who wants to be fee-ed to death?)  But their online form fritzed out when I tried to enter the LLC owner.  It also wanted a birthday for the owner who didn’t have a birthday, because the owner is an entity, not a person.  When I called them the person I spoke to on the phone was about as helpful as the online form.

Next I tried Wells Fargo, and their online app let me complete it and choose that the owner was an entity, and that I was a “key personnel with executive control.” Then it gave me some forms I had to sign and turn into a local branch.

The next day I took the forms to a local branch, and… the form was malformed, and they couldn’t find my app in the computer.  The bank rep called corporate, and turns out I had to re-apply through his system.  When it came to the “owner” question, he said, “For our purposes, you’re the owner; I know it’s not technically correct, but you sign the checks, and the EIN flows through to your SSN.” (or something like that)

Now, sign the forms; give them copies of the LLC documents (same as in the step above); give them the endorsed check you requested above…

Congratulations.  You are now the proud owner of a fully funded IRA LLC.  Don’t forget to create an online account.  You’ll need it in the next step.

Step 4: Get a Coinbase account

Set up a Coinbase account.  This part is a bit confusing.  If you click on support and ask Coinbase about Business accounts, the only guidance that you can get is “open a Gdax account” for businesses and trading professionals.  However, when you go to Gdax, it just has you “create a Coinbase account.”  If you click on Contact Support, it says that what you’re asking for isn’t a support priority and won’t let you continue.

So you:

  • Put in your name, and the e-mail address of your business, and a password. (Note: there is never any place to actually put in your business name.)
  • Confirm your account with the e-mail they sent you.
  • Set up 2 factor authentication
  • Upload your Driver’s License (it took about five minutes for them to verify)
  • Now connect your bank account account
    • This is now significantly improved from earlier.
    • You select your bank from a list of partners.
    • Log in using your bank’s credentials that created in the step above.
    • Verify that it’s you with a text message
    • Done
  • Now go to Gdax.com again.
  • It will ask you to add an account, but if you try it will say that it’s already linked, so just say continue.
  • You’re DONE.
  • Go to you’re USD wallet and click the down arrow (deposit)
  • Click on the wire instructions and call your bank to set up a wire.  If you’re requesting early in the day, the funds should be in Gdax the same day.  If you’re investing more than $2000, it’s probably cheaper to wire the funds than to use the ACH function in Coinbase.  Also, your wire has a good chance of getting there the same day as opposed to doing it through Coinbase where you have to wait 5 days before your funds clear.

    Note:
    (It seem that many banks will let you request a wire for up to $10,000 online or in their mobile app.  If you want higher than that, then they’ll make you call or visit a branch bank. (Maybe if you bring your laptop to the bank, you could do this step immediately following opening the account and then set up your wire before you leave!)

Update: I finally found where you tell Gdax that you’re a company.  It’s in the Withdraw section when you ask them to increase your daily withdrawal limit.

While you’re waiting for your wire to go through, don’t forget to sign up for accounts at the exchanges you’re planning on trading on with your IRA’s e-mail address.

Final words

Be very careful NOT to engage in any prohibited transactions.  If you’re audited (the IRS says that it’s targeting IRA/LLCs), your IRA could lose IRA status forever.

The IRA will need to pay an annual registration fee with the state you incorporated in, so save some money for that.

You’ll also need to reserve some money for the IRA account fees, and Bank account fees (or maintain the minimum balance to avoid the fees).

You’ll need to provide an annual valuation of your LLC to the custodian that is prepared by a qualified third party (i.e., NOT you or a direct relative).

Overall the process is not that hard, but if you don’t know what to expect or what the right words are, it’s easy to feel stupid and lost.

Dealing with Nick Spradlin was very easy and quick despite my not paying for the expedited service.  I’m not sure if he works in all states, but I know he advertises in Florida and Texas.  (If I had paid for the expedited service, I might have been able to catch this recent dip and pick up some Litecoin for $150 and Ether for $950.)