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Arc made an important announcement recently. The testnet code went open source and the bug bounty program launched. I set up an Arc Local Testnet and in this post I'll walk you through the entire process.

This setup is not straightforward. You will run into errors. But you can work through every technical issue using Claude.

Before starting the setup, paste these links into Claude. This way, whenever you run into a technical issue, Claude can check the documentation and guide you more accurately:

https://docs.arc.network/arc/concepts/welcome-to-arc

Let's clarify this before moving forward because they are two different things.

When you set up a Local Testnet, you run a small copy of the Arc network on your own machine. It's not connected to the internet and nobody outside can see it. 5 validator nodes, 1 full node and a block explorer, all running on your computer. You can test, look for bugs, and experiment freely. That's what this guide covers.

A Public Testnet Node means connecting to Arc's actual test network. You follow real transactions from other users and become part of the network. However, this requires much more powerful hardware, at least 64GB RAM and 1TB SSD. I haven't tried this yet. I'll write a separate guide when I do.

Arc rewards people who find and report bugs on the local testnet. The program runs through HackerOne. Rewards range from $150 to $5,000+ depending on the severity of the bug.

The basic idea: set up the node, run it, try to break or slow down the system. If you succeed and can prove it, you get the reward. I'll cover this in more detail in a separate post, but you can start by checking hackerone.com/circle-bbp.

Before moving on, decide: will you run this node on your own computer or rent a VPS?

If you're using your own computer: You need at least 8GB RAM. The build process will put significant load on your machine, which is expected. If you're on Windows, continue with the WSL Setup section below.

If you're renting a VPS: If your computer isn't powerful enough or you want the node running 24/7, a VPS is a good option. Continue with the VPS Setup section below. After completing the VPS setup, jump to the Clone the Repository section.

I used Hetzner as my VPS provider. Sign up, then create a new server.

Pay attention when choosing a server: get at least CPX32. It comes with 8GB RAM, 4 CPUs and 160GB SSD for around €14/month. On servers with 4GB RAM, the build process runs out of memory and gets killed. I tested this and it doesn't work.

Select Ubuntu 22.04 as the operating system. Helsinki or Nuremberg are good location choices, affordable and fast.

Once the server is ready, you'll receive an email with the IP address and password. The IP address is your server's address on the internet.

Open PowerShell on Windows or Terminal on Mac. Type the following, replacing SERVER_IP_ADDRESS with your actual IP:

Press Enter. On the first connection you'll see:

Are you sure you want to continue connecting (yes/no)?

It will then ask for your password. Type the password from the email. Nothing will appear on screen as you type. Press Enter.

On first login it will ask you to change your password. Enter the current password first, then your new password twice.

Once connected, you don't need WSL since the server already runs Linux. Skip directly to the Clone the Repository section.

WSL is a tool that lets you run a Linux terminal inside Windows. Arc node runs on Linux, so we need to install this first.

Open PowerShell as administrator. Search for PowerShell in the Windows search bar, right-click it, and select "Run as administrator." Paste the following into the black window and press Enter:

Restart your computer after the installation is complete.

After your computer boots up, search for Ubuntu in the Windows search bar and open it. On first launch, it will ask you to create a username and password. Write these down somewhere because you'll need the password in later steps.

Next time you want to open the Ubuntu terminal, just search for Ubuntu in the search bar and open it. You can also type the following in PowerShell:

Both open the Ubuntu terminal. Continue from here.

Run the following commands one by one in the Ubuntu terminal or on your VPS. Press Enter after each one and wait for it to finish:

git clone https://github.com/circlefin/arc-node

This downloads Arc's source code to your machine.

This downloads the additional code that Arc depends on. This may take a few minutes, wait for it to complete.

This updates your system's package list. It will ask for your password. Type the one you set earlier. Nothing will appear on screen as you type.

sudo apt install docker.io make nodejs npm libclang-dev -y

This installs all required tools. libclang-dev is mandatory for the build process. If it's missing you'll get errors later.

Add your user to the Docker group so you don't need to type sudo every time:

After running this command, you need to fully close and reopen the terminal for the change to take effect.

For your own computer, type this in PowerShell:

Then reopen Ubuntu and go back into the arc-node folder:

For VPS users, close the terminal and reconnect:

The version of Node.js that comes with the system is outdated. Version 22 is required:

This installs the Node.js version manager.

This tells the terminal where to find the new Node.js. Without this command, the terminal will keep using the old version.

Foundry is required for the build process:

curl -L https://foundry.paradigm.xyz | bash

This tells the terminal about the new installation. Sometimes this isn't enough and the terminal continues using old settings. In that case, fully close the Ubuntu terminal and reopen it, then go back into the arc-node folder:

Then install the specific version of Foundry required:

The version of Docker Compose that comes with the system is not compatible with Arc node. We need to install a newer version manually:

sudo mkdir -p /usr/local/lib/docker/cli-plugins

sudo curl -SL https://github.com/docker/compose/releases/download/v2.24.0/docker-compose-linux-x86_64 -o /usr/local/lib/docker/cli-plugins/docker-compose

Arc Local Testnet Node Setup Guide for Beginners

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