Monero: New function offers financial incentive for operating a node

  • With the last Monero network upgrade, the RPC-Pay function was introduced.
  • RPC-Pay offers a financial incentive to operate a public Monero node.

The leading privacy coin on the crypto market, Monero, could become even more interesting for potential users with a new feature. With the last network upgrade in November, the CryptoNight algorithm used since the Genesis block was removed and replaced by RandomX. The algorithm was introduced with the aim to ban ASIC mining from the Monero network once and for all. RandomX also massively promotes CPU mining, which has significant performance advantages over GPUs.

As Monero Outreach recently announced via Twitter, the upgrade also introduced a previously unnoticed feature with RPC-Pay. This could attract more users to the XMR network. RPC-Pay is said to be an innovative way to encourage server operators to earn Monero “as an alternative to advertising revenue”. According to Monero Outreach, the feature therefore has the potential to have a revolutionary effect.

How does Monero’s RPC-Pay work?

Until now, many users have been asking themselves why they should operate a public Monero Node. Operating it costs money and at least does not generate any direct income. RPC-Pay offers a solution to this problem by providing an incentive to operate a public node. How it works is described in detail in the Monero Outreach blog post:

RPC-Pay offers this incentivization, and much more. It gives a way to use Monero mining hashes—just the hashes—to pay for Remote Procedure Calls (RPCs) from any RPC-Pay-enabled server, such as a Monero node. Hashes received as payment are used by the server to earn income, and because of Monero’s RandomX the mining hashes can be calculated efficiently using most popular CPUs.

Paying with just hashes instead of Monero itself means that RPC-Pay does not burden the Monero network or leave a record. With RPC-Pay, mining hashes become a new stealthy smallest unit of payment in the Monero universe.

Payment by hashes becomes technically possible because the payment address is specified in the hashing process before the hash is generated. This allows hashes to be created specifically for someone else. This property is also used by mining pools, for example, to create hashes using the payment address of the pool.

With RPC-Pay, the hashes are calculated by the RPC client itself and the hashes are sent to the server during the calculation.

Every hash sent counts as payment. A miniscule percentage of the hashes will actually have value to the server—those that, when represented as a number, mine a block by being small enough. […] The server, then, counts all the hashes for credit, but only receives payment itself when it receives and publishes a successful mining hash on the Monero network.

The advantages of RPC-Pay

The article also states that this new feature has several advantages and that it contributes to the decentralization of Monero, as potential users “want to run a server that pays for itself”. RPC-Pay could also encourage some wallet users to run their own node. Another advantage is privacy. RPC-Pay is private:

The mining hashes used for payment are anonymous without a way to trace ownership on the blockchain. A payment ID can be applied to track and maintain balances, but with an operating procedure based on small balances, this ID can be changed regularly or not used at all.

As Monero Outreach writes, any server on the Internet that provides data or calculations to clients is a potential candidate for using RPC-Pay.

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About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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