Digital Currency is the new way to make money. Here are important steps to create your own cryptocurrency like Bitcoin/Litecoin.
The term “cryptocurrency” was first heard by many people when Bitcoin was introduced in 2009. Today, it is one of the top digital currencies in the world. Cryptocurrency commonly refers to digital currency or asset that was created to secure the medium of transactions of money. Also known as Coin, Token & ICO in the development industries.
When we first heard about cryptocurrency, most of us ignored it as a temporary thing that will probably fade away in a few years or so, but now we understand that cryptocurrencies are here to stay.
Difference Between A Coin And A Token
While most people, including many professional investors, think that both coin and token represent the same thing, it is not actually true. Coins and tokens are two different types of cryptocurrencies.
Cryptocurrencies that operate on their own blockchains are called coins. Common examples include bitcoin, Litecoin, etc. Tokens, on the other hand, operate on an existing blockchain system like Ethereum.
The blockchain is a collection of transaction ledgers. Since c0oins have their own blockchains, they maintain their own network of transactions, while tokens make use of the underlying blockchain technology for verifying their transactions. Coins are considered ideal for the transaction of money and other financial assets. Tokens are mostly used for creating smart contracts for various things like physical items, reward points or anything else.
Tokens are usually sold through ICO (initial coin offering) events in exchange for popular coins. Coins can be directly purchased in the exchange market.
Building Your Own Blockchain
Like we said before, building a coin will require you to have your own blockchain. Here, you have two options – you can either build a blockchain from scratch or you can modify an existing blockchain according to your coin requirements. For both options, you will require considerable technical knowledge and coding skills. Alternatively, you can seek the help of a professional code developer.
The process of building a blockchain system involves the following steps:
Identifying the right subject matter based on the things that blockchain can do – data verification, smart contracts, and smart asset management.
Finding a method of agreement (consensus) that makes the perfect sense for your blockchain idea.
Choosing the right blockchain platform from options like BigChainDB, Corda, Eris:DB, Ethereum, Multichain, Quorum, etc.
Deciding the terms and features for node creation.
Configuring the blockchain for various elements like permissions, key management, asset issuance, parameters, block signatures, etc.
Creating APIs for smart contracts, key pair & address generation, data storage and access, etc. (optional)
Designing the user-interface and admin panel using a front-end programing language and an external database and web server.
Implementing future technologies like Artificial Intelligence (AI), Cloud, Data Analytics, Machine Learning, etc for further enhancing the power of the blockchain. (optional)
However, if you are planning to create a new token, you will just have to choose a reliable blockchain standard like Ethereum’s ERC20 for your tokens to operate on, and you are good to go.
Many people now wonder if it is possible for them to create your own cryptocurrency and if yes, then how. Let’s find out.