How to Create Your Own Cryptocurrency
So, what is a cryptocurrency?
Cryptocurrency, also known as cryptocurrency, is a digital asset with multiple use cases. It is mainly a way of digitally transferring value between people, including monetary value, property rights, and even voting rights. The difference between encryption and other digital payment systems is that it is rooted in blockchain technology. This foundation allows cryptocurrencies to gain more freedom from central players such as governments or banks.
Bitcoin is the most famous example of cryptocurrency. It has a simple use case to transfer monetary value to people all over the world without an intermediary. Its blockchain records all transactions and ensures the security and stability of the network.
Benefits of having your own cryptocurrency
- Financial flexibility. Encrypted currency is a digital currency and cannot be tracked, traced or controlled by any financial institution such as the Central Bank. This means you have greater financial flexibility because you can develop currencies to meet your business needs.
- Brand your business. Owning your own cryptocurrency will definitely add value to your brand. Given the growing trend, this is obvious because even giants like Microsoft have developed their own cryptocurrencies. Following the trend and owning your own cryptocurrency can give you a much-needed advantage in the competition, because your customers begin to see you as a futuristic and technologically advanced business organization. There is no doubt that owning your own digital currency will also increase customer confidence in your business.
- Project public or crowdfunding. Whether you need a little start-up capital to realize your business idea, or want to launch a crowdfunding campaign to support commercial or non-commercial projects, there is nothing better than owning your own cryptocurrency for fundraising. Usually, a lot of paperwork, permits, etc. are required to actually raise funds for the business.
- Safety and economy. Although cryptocurrency is much safer when making transactions, having a dedicated token for your business can also save you a lot of money. Since it is easy to track transactions, you won’t just waste money on recording and tracking transactions like other methods. This adds up to the savings at the end of the year. More importantly, if your business relies on international transactions, you can save unnecessary taxes and transaction fees every time you make a transaction.
- The currency of the future. With the advancement of blockchain technology, there is no doubt that cryptocurrencies will soon become mainstream.
How to Create a Blockchain
Once the blockchain network is established, the next step is to agree on the types of commercial transactions that occur in the blockchain architecture. In fact, these rules are written in the legal agreement. Logically speaking, in blockchain code, this refers to smart contracts (also known as Chaincode, or Hyperledger Composer’s definition of business networks).
Just like in the real world, blockchain contracts have participants, assets, and transactions. For each transaction, a transaction handler function (reflecting JavaScript) is written and outlines what happens after the transaction is created.
How to Make Your Own Crypto in 8 Steps
Step 1. Know your use-case
Are your business interests smart contracts, identity verification and data verification, or knowledge asset management? Be clear about your goals from the start.
Step 2. Choose a consensus mechanism
In order for your blockchain to run smoothly, participating nodes must agree on which transactions should be considered legal and added to the block. The consensus mechanism is the agreement to do this. There are many options to choose from, which best suit your business goals.
Step 3. Pick a blockchain platform
Your choice of blockchain platform will depend on the consensus mechanism you choose.
Step 4. Design the Nodes
If you think of the blockchain as a wall, the nodes are the building blocks that make up it. A node is a device connected to the Internet that maintains the blockchain and performs various tasks, from storing data to verifying and processing transactions. Blockchain relies on the efficiency, support and security of nodes.
Step 5. Establish your blockchain’s internal architecture
Please be cautious, because when the blockchain platform is up and running, some parameters cannot be changed. Take a moment to carefully consider the following:
- Permissions (define who can access data, execute transactions and verify them, ie create new blocks)
- Address format (determines the appearance of your blockchain address)
- Key format (determine the key format that will generate the signature for the transaction)
- Asset release (setting the rules for creating and listing all asset units)
- Reissue assets (set rules to create more units of open assets)
- Key management (development of a system for storing and protecting private keys that provide access to the blockchain)
- Multi-signature (determine the number of keys required for your blockchain to verify transactions)
- Atomic swap (a smart contract scheme that allows you to exchange various cryptocurrencies without a trusted third party)
- Parameters (estimation of the maximum block size, block mining rewards, transaction limits, etc.)
- Owned assets (define the rules of national currency issuance by blockchain)
- Block signature (define how the blockchain participant who created the block must sign it)
- Handshake (setting the rules for how nodes recognize themselves when they are connected to each other)
Step 6. Take care of APIs
Make sure to check if the platform you choose provides pre-built APIs, as not all platforms support it. Even if your platform does not have them, don’t worry: there are many reliable blockchain API providers out there.
Step 7: Design the Interface (Admin and User)
Communication is key, and a well-designed interface ensures seamless communication between your blockchain and its members.
The following points should be kept in mind at this stage:
- Web server, mail and FTP server
- External database
- Front-end programming languages (such as HTML5, CSS, PHP, C#, Java, Javascript, Python, Ruby).
Step 8. Make your cryptocurrency legal
Slowly but surely, the law is catching up with cryptocurrencies, and you can better protect yourself from any unexpected influences by checking the trend of cryptocurrency regulations and where they are developing.
