The error is not with the droplet but rather the service you are running on the droplet.

Example: NGINX(Proxy) –> NODEJS
NGINX may be trying to connect to to the backend service NODEJS which is unavailable so NGINX returns a 500 error.

HTTP Error 500 means the droplet is up, but there’s an error in the webserver software.

What webserver are you using (apache, lighttpd, nginx?) Are you running any server-side scripts such as CMSes there (php, nodejs, python-django, python-flask)?

Check the error.log for your webserver. It could give some insight as to why error 500 is being returned.