Your tank is coming along nicely. That is an excellent price for good looking live rock. I have to order mine as what the LFS here is rock and not live rock no matter what they call it. I have only purchased two pieces from an LFS and after 3 years the two were finally supporting small critters.
Your light cycle is fine. If you start seeing too much algae, you can cut back to reduce growth but you have very low wattage bulbs and some light is helpful to grow the bacteria.
Below is my recommended schedule for cycling the tank. You will read many different successful cycle schemes but this one works for me.
Let the tank cycle as is (skimmer off, no water changes) for a month (stir your sand weekly). With precycled rock you can test for ammonia, nitrites and nitrates in about 2 weeks (if you can find them, the strips are very good to have for both water quality and acclimation but otherwise take a small amount to your pet store and have them test it - this is usually a free service here). If you show no ammonia or nitrites
and some nitrate, you can start adding and
feeding a clean up crew with small frozen shrimp or tiny pieces of larger shrimp. Feeding is necessary, not so much for the clean up crew but to create small amounts of ammonia to grow the bacteria. At two weeks hermits and snails should be fine. In a month (again test your water and only add critters if you show zeros on the ammonia and nitrites) you might consider adding a serpent or brittle star (two will work nicely in that sized tank and avoid the green serpents and common starfish, the greens eventually become too agressive and the commons will starve) and a couple of mithrax crabs (they help with hair algae and may or may not be eaten by an octo).
After a month (again only if you have good water readings), do your first water change (I recommend 10 gallons for this one and 5 gallons a week after you have an octopus), change your carbon and turn on your skimmer consider adding a pair (but no more) of peppermint shrimp. These will eat small aptasia (not larger ones) if you happen to have them and
may survive an octo if well established in the tank in advance (adding afterwards is guaranteed expensive food). Increase your feeding of meaty foods (frozen shrimp are high ammonia generators so they are my choice but you can also add marine flake or pellets that contain fish or shrimp). If your
nitrates exceed 20 ppm, start weekly water changes.
After two months, you can try mushrooms, replace any clean-up crew that died and consider some octo safe polyps. Generally speaking, polyps with very short feeding tenticles will have low stinging potential but read about any that you consider. Attach any polyps to loose rock so that if you see an octo react, you can remove them and trade the polyps for an alternate (not necessary for mushrooms but don't
plant them where they will cover opening between the rocks or the octo will dislodge them). Tree sponges (avoid ball sponge) and gorgonians can be placed in an octo tank but should not be tried until the tank is established for about a year and then need more water flow than your current setup provides (photosynthetic gorgonians will need a brighter light source but there are some that can survive your lighting with more waterflow). Check your nitrates, if they exceed 20 ppm, increase your water changes.
If everything checks out at the end of three months (I like to wait 4 for a new tank) you should be ready to try your first octopus. I would suggest you wait until the three month mark and then go shopping without buying a couple of times and just look at the octopuses in the tanks. Try to get a feel for health. Unfortunately, size is not a good indicator of age. Do you see it changing color when you move toward it? Does the entire body react or is the change splotchy (one side reacting and not the other is OK but not patchy color). Does it look "grey" rather than a clear white? IMO Males are preferable to females because of the time lost when they brood (and then die). Try to be able to identify a male by looking at the third arm to the right (clockwise from the eyes). This arm will be kept curled and not used when climbing around. It will take some study to get a feel for finding your best chance in a poor environment but will be worth the time and you will learn something of their nature. I recommend doing this ONLY after your tank is ready as the temtation is likely to be too strong to buy one before the tank is ready.
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A few newbie notes, as your tank water evaporates, you need to replace it with
fresh, preferably RO/DI water, DEFINITELY water with no chlorine (letting water stand in an open container for 48 hours will eliminate chlorine). Only use saltwater to replace water that you have removed.
Keep your glass clean through out the cycle, algae build up is much harder to remove and cleaning the glass will have no negative effect.
Do not add fish for any reason. Your live rock and feeding your clean up crew will produce a proper cycle. Fish are not good food for an octopus (not harmful in small quantity though) and some will attack or at least pester an octo. You will read about successes with fish and octos but not in this sized tank and not in a newly established tank.
Keep your sand stirred and use a turkey baster to clean your rocks weekly. After cycling be consistent with your water changes (I recommend 5 gallons a week, 5 gallons every two weeks if there is no octo present).
The "putty" is likely to be epoxy and harmless. It does mean it was in someone elses tank though. With a little effort, it will peel off.
If the bar on the left back is an air stone, I would move it to the bottom of the tank. If it is your return from the canister, I would do the same. EIther way it will provide more benefit to the water quality.