Obviously you're not gonna give anybody 1600 msp, but here is your answer. No. A keyvault(KV) is inside of every Xbox and when Microsoft bans that KV you can replace it with an unbanned KV(If your Xbox is RGH'd/JTagged.) XBLSE is a website that will give you a certain amount of time to be online with your RGH/JTag/etc. which basically fools Microsoft into believing that you are not on a modified console.

SO THATS WERE XBLSE COMES INTO PLAY CORRECT

Without XBLSE your console and any other consoles on the same IP as you will more than likely get banned. Yes.

AND BASICALLY IF I HAVE A MODDED CONSOLE I CAN HOST FREE UNTIL I GET MY KV BANNED FOR THE FIRST TIME AND YOU ARE RIGHT I CANT PAY MSP BUT CAN PAY PAYPAL I GOT 5 DOLLARS IF YOU GIVE ME YOUR E-MAIL

That is only if the console goes on Xbox Live.

GIVE ME YOUR PAYPAL EMAIL AND HOW DOY I GET THE MODDED CONSOLE ON TO XBOX LIVE

xbryanrodriguez @ gmail.com lol

And perhaps there are tutorials on YouTube? I believe they tell you the process on the website/after you purchase the service, but I could be wrong.