Dangers of hosting your own Ethereum 2.0 node, explained

You could end up being penalized, eliminating any financial reward from operating a node.

It’s worth bearing in mind that you risk being penalized even if the circumstances were outside of your control. A dodgy internet connection — something that’s commonplace for many of us living in residential areas — could result in a slashing event occurring. Given how these outages can be caused by everything from bad weather to water damage and road repairs, relying on the infrastructure you’ve got at home isn’t necessarily the best idea.

As a result, many of the people who want to operate their own node have decided to pay for an external hosting provider, where they have a greater chance of receiving the type of uptime they need to be regarded as a trustworthy validator. But again, even this approach isn’t without potential pitfalls. Selecting a hosting provider that can’t guarantee continual service could trigger financial losses, and you may not be eligible for compensation as such downtime is often factored into the terms of service.

If you are going to opt for an external hosting provider, it’s crucial to read legitimate reviews — helping you to form an opinion about whether the company is reputable. Finally, always remember that market-leading solutions may not be the best course of action for hosting a node. In November, an Amazon Web Services outage affected countless thousands of websites, including the likes of Coinbase, and such an event would have hurt Eth2 node operators too.