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First of all, a nano-reef tank is generally any reef tank under 30 gallons, and can be as small as 1 gallon. Any tank this small is generally considered difficult to keep, as the small quantity of water means that any small mistake is amplified. Any amount of evaporation can cause an increase in salinity very quickly, and most fish are very intolerant of increasing salinity, though they can tolerate some decrease. I'll start with equipment needed and reccomended along with price estimates based on my online shopping around.
Tank, say 10 gallons. This is a common size and readily available. $10.
Glass top (Perfecto Versa-Top) to prevent excessive evaporation and fish jumping, as well as keeping the tank free of dust. $7.
Penguin mini filter to provide water flow and the ability to add carbon, ammonia absorbing bags or phosphate absorbing bags. $15.
Heater, 50 W submersible. I like the Hagan mini compacts, only 6" long. $12.
Powerheads for water movement. Most corals like high flow rates and it is good to randomize the current, i.e. not just having a big powerhead blast water from one side to the other. For this reason, two smaller powerheads are good. The mini-jets seem to be the best. $25 for two.
Lighting... this is a huge topic that takes a lot of investigation. I only know about Power Compact (PC) lighting. There is also VHO and metal halides. Metal halide is the best, the most expensive and runs the hottest. For PC lights, there are two ways to go, but a PC hood or retrofit kit. I was going to get the PC hood. Custom Sea Life makes a very nice 2 x 40 W light with a built in moonlight that goes for $112. CoraLife makes a 1 x 96 W bulb that is also very nice and very powerful, $90. You want mounting legs for these so there is air between the lights and the tank to allow for dispersion of the heat that will build.
Some sort of auto-top off system is a really good idea, for dosing calcium and preventing evaporation. There is a lot of different options, from simple gravity driven IV-style setups for $20 to complex dosing pumps that go for more than $100.
That is the necessary hardware. We are now ready to add water and already have spent around $170, give or take. Now buy salt ($20-$40 depending on how much you buy).
Fill tank with RO/DI water. If you use tap water, in about a week you'll have a nice green and brown tank of Hair algae and diatoms. There's too much nutrients and in tap water that will fuel the growth of low plants. Buy a RO unit for $150 or buy RO water at the grocery store for 49 cents a gallon.
The main method of filtration in a reef tank is biofiltration by the addition of live rock and live sand. This is rock and sand that is full of microorganisms that live off of the nutrients provided by the macroorganisms in the tank. Live rock comes in several different flavors, named by the place it comes from. Tonga is very common, as is Fiji and Marshal. I believe Fiji is the most pourous, which is good because it saves you money and proves more homes for shrimps and inverts. My personal selection would be aquacultured rock. This means that dead rock is shipped out to sea and left to sit for a couple of years. It becomes home to reef creatures and becomes live rock. All without destroying natural reefs. Live rock prices are all over the place, depending on season and where you're at. In Chicago, LR goes for $6.99 per pound for Fiji and $10.99 per pound for Bali rock which is supposed to be even more pourous. Online you can get it for about $3-$4 per pound, but then you get stuck with overnight charges... liverocks.com is a great site for rock. Live sand is the same idea as live rock, only its sand! You can skimp here by buying dead Southdown sand and seeding it with live sand, either purchased or from an existing marine tank. Sand goes for about $2-$4 locally, $1-$2 online. For quantities, pounds of live rock is 2 times the number of gallons (10 gallons = 20 lbs live rock). Sand is 1 to 1.5 times gallons (10 or 15 lbs). I got a quote from liverocks.com for $120 for 20 lbs rock and 10 lbs sand. So we're in the neighborhood of $300.
Add live rock to tank and cycle... If you ship live rock, you're cycle may be a long time (like a month). A lot of live rock die off occurs during shipping, so it takes a little white. Local live rock may cycle in as little as a week and a half, but maybe as long as 3-4 weeks. After you cycle, you can add your invert clean-up crew. Shrimp, especially cleaner shrimp are a good choice, as well as hermit crabs, bumblebee snails, astrea snails and trochus snails. Try for about 10 snails, and maybe 4 or 5 hermits. Mithrix crabs are good too, as they eat bubble algae. A personal favorite of mine is the fighting conch...
After a couple of weeks after cycling, you can add corals. I never got real far into reasearching what corals are good, but start with soft corals and mushrooms and leather corals. These are the least demanding. Avoid frogspawn, as it can sting your other corals and there isn't a whole lot of room in a nano. After you are a little more familiar with soft corals and such, small polyped stony corals (SPS) can be tried. From there its large polyped (LPS). LPS aren't a great choice for nanos and they require a LOT of light. The ones I've reccomended require only about 8-10 watts per gallon (80-100 watts in a 10 gallon). But each coral has its own lighting requirements that you need to research. Also reasearch its disposition. Some will be more aggressive with their sweeping tentacles than others.
After you get some of your corals in, fish are next. Fish should always be added last to a reef because they produce prodigous amounts of waste. They are very taxing to the biofiltration and should only be added one at a time, with several weeks in between introductions to prevent algeal bloom and nitrite/nitrate spikes. You can generally estimate a fish's nano-reef compatibility based on two things, #1: is it reef compatable? If not, it will eat your inverts and corals. If yes, proceed to #2: how big does it get? If it gets more than 3-4 inches, forget it. Another consideration is how active is it? Very active fish don't do well in nanos because of the small space causing stress.
More important than what fish you can have is the concern of what fish you shouldn't have. Mandarin fish are one of these. They only eat copepods, tiny crustaceans. A nano can't provide an adequate copepod population for these fish unless it has a huge refugium. These fish will slowly starve to death. Cleaner wrasses are another no-no. They don't last in captivity because they are such specialized feeders and they are FAR FAR too important in nature to be removed. I try to avoid shopping at LFS that even stock these fish. Nudibranchs should not be kept, as their feeding requirements are not well understood and will most likely starve to death quickly, while poisoning your tank. Anemones should not be kept at all in my opinion, but if you must, give the tank 6 months to mature.
All in all, expect to spend around $7 - $10 per gallon of nano reef. Also, keep in mind, you get what you pay for. If you skimp, you risk disaster. Buy the best, most powerful lights you can because if your lights aren't strong enough, your corals will not live and you will waste a lot of money upgrading. Read up on supplements, as adding trace elements and calcium greatly improve coral growth. I'll add more after I read through everything and notice what I forgot or any questions arise.
 

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joey'd is da man
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Thank you for sharing this with us
 
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