Welcome to the Homestaking tutorial. Whether you're looking to run a validator or just explore Ethereum’s decentralized ecosystem, this guide will take you through the essential steps for getting started. We’ll cover everything from setting up a node to understanding how Ethereum's network operates and how you can participate.
Let’s dive in and start by understanding what Ethereum is and how it works.
The Ethereum network is a decentralized peer-to-peer network that processes Ethereum blocks and transactions. Ethereum's primary purpose is not just as a digital currency. It serves as a global, open-source computer that allows developers to build decentralized applications, which range from games to financial services. Powered by Ethereum's native cryptocurrency, Ether (ETH).
The Ethereum network that hosts real-world applications is referred to as Ethereum Mainnet. Ethereum Mainnet is the live, production instance of Ethereum dedicated to managing real ETH and holds real monetary value.
There are other live test instances of Ethereum dedicated to managing test ETH. Each network is compatible with (and only with) its own type of currency. These test networks allow developers and participants to test functionality before using real ETH on the Mainnet.
Every Ethereum network is divided into two layers:
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Execution Layer (EL): The execution layer is responsible for processing transactions and executing smart contracts. It handles the computation and processing of code and data within the Ethereum network.
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Consensus Layer (CL): The consensus layer is responsible for reaching agreement on the state of the Ethereum blockchain among all participating nodes. It ensures that all nodes have the same view of the blockchain and agree on the order of transactions.
The Ethereum network consists of Ethereum nodes. An Ethereum node is a running instance of Ethereum software that consists of two components: an execution client and a consensus client. These clients are a part of their respective layers within the Ethereum network.
The consensus clients can also function as validator clients, which are also a part of the Ethereum's consensus mechanism. Validators, as the name suggests, are responsible of validating new blocks of transactions. The validator client connects to the Ethereum network's CL trough the consensus client, and it is possible for a these clients to perform the roles of both a consensus client and a validator client simultaneously.
Running a validator can be a way for individuals to earn income while contributing to Ethereum's security and decentralization. To participate in Ethereum's proof-of-stake consensus mechanism and have the opportunity to earn a profit, a validator requires staking 32 ETH to be activated.
Profit mainly comes from:
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Block Rewards: Validators receive a portion of newly created ETH tokens as block rewards. These rewards are distributed to validators for their role in proposing and validating new blocks on the blockchain.
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Transaction Fees: Validators also collect transaction fees paid by users for executing smart contracts and conducting transactions. These fees are an additional source of income for validators.
Syncing with a network refers to the process of downloading or updating the blockchain data from the network. Once the node is fully synced, it can participate in the network and interact with other nodes, smart contracts and decentralized applications on the network. There are multiple types of sync modes that represent different approaches to this process, each with various trade-offs.
As of September 18, 2023, the Ethereum blockchain's full sync data size is 1221.43 GB. It is important to note that the size depends on several factors, such as the client and filesystem you are using. The full sync data size can potentially be reduced by using a COW filesystem and a compression method.
There are several Ethereum clients out there and figuring out how to set them up can be confusing, especially with all the different APIs. To make things easier for you, we've provided some essential information on the configuration options of an Ethereum client when you're just getting started.
Here is a list of commonly used clients and links to their documentation:
Execution Clients 
Consensus Clients
When you are deciding which clients to use, please consider using a minority client to improve the Ethereum's resilience. You can check the client distribution at clientdiversity.org.
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“Data Directory” - This refers to the location on disk where the Ethereum client stores its database, including all blocks, transactions and other information.
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“Network” - There are multiple networks, such as the mainnet and testnets like Sepolia and Goerli. It's important to specify which Ethereum network the client should connect to.
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“JWT Secret” - JSON Web Tokens (JWT) are commonly used for authentication and authorization in web applications and APIs. In the context of Ethereum client configuration, JWT Secret is utilized for authentication between Ethereum clients. To enable communication between the clients, they should share the same JWT Secret.
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“Pruning” - Pruning is the process of erasing historical transaction records and smart contract states that have been processed in order to save disk space. Do not try to prune an archive node, since the archive nodes need to maintain ALL historic data by definition.
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“Metrics / Monitoring” - This feature allows you to collect and monitor performance-related data and statistics from your Ethereum client. Typically, these metrics are saved to the data directory of the client.
In order for a software application, users and other clients to interact with the Ethereum client, it must have a means of communication. This is most commonly achieved by using a JSON-RPC API, which is a remote procedure call (RPC) protocol where requests and responses are formatted as JSON objects.
Here's a simple example of how you can use a tool called curl to get the Ethereum client's version using the HTTP JSON-RPC:
curl -X POST -H "Content-Type: application/json" --data '{"jsonrpc":"2.0", "method":"web3_clientVersion", "params":[], "id":1}' http://192.168.100.10:8545Response could look something like this:
{"jsonrpc":"2.0","id":1,"result":"erigon/2.48.1/linux-amd64/go1.20.6"}The Ethereum client can be configured to have multiple interfaces to achieve communication, each serving its specific purpose:
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“Engine RPC” - This interface allows clients to communicate with each other, enabling essential interactions, such as communication between a node's execution client and the consensus client. The default ports for the Engine RPC are 8551 for execution clients and 5052 for consensus clients.
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“HTTP JSON-RPC” - This interface is the most common way for applications or users to interact with an Ethereum node. When a execution client exposes this interface, you can send HTTP requests (typically POST requests), like the one demonstrated above with
curl, to perform actions like sending transactions and querying blockchain data. The requests and responses are formatted as JSON objects. The default port for the HTTP JSON-RPC interface is 8545. -
“WebSockets” - Similar to the HTTP JSON-RPC API, but operating over WebSockets (WS). They maintain a persistent, bidirectional connection, which can lead to lower latency and more efficient real-time communication, making it ideal for applications that require constant data streams or continuous monitoring of blockchain events. The default port for the WebSockets interface is 8546.
Each of the interfaces usually has options to set the address, port and allowed hosts. Allowed hosts are often referred in a manner like "corsdomain" or "allow-origins" in the client configuration options.
For more comprehensive information about the JSON-RPC APIs, visit: https://ethereum.org/en/developers/docs/apis/json-rpc/
In addition for basic settings and communication interfaces, consensus clients may have some unique configuration options such as:
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“Execution Endpoint” - The consensus client needs to send execution requests to an execution client, so the address for the execution client must be defined.
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“Slasher” - This refers to a part in the proof-of-stake consensus mechanism that penalizes validators for malicious behavior or double-signing blocks. It imposes a penalty by deducting a portion of a validator's staked cryptocurrency, discouraging fraudulent activities and preserving the integrity of the consensus mechanism.
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“Builder (MEV-Boost)” - Maximal Extractable Value (MEV) refers to the process of strategically manipulating the order of transaction execution to maximize profits for validators.