How To Make Create Your Own Cryptocurrency

Are you looking for a how-to make create your own cryptocurrency? this is the right place you land here. this article covers the topic of how to make your own cryptocurrency & how to create your own cryptocurrency.

A guide to creating your own cryptocurrency

After the inception of Bitcoin in 2008, there are more than 8000 cryptocurrencies out there in the financial market. Though some of them are backed up by the community & some are traded in volume. But a few of them are hardwired to withstand market crashes and fluctuations. 

Theoretically, Creating a Cryptocurrency is possible, but it needs the knowledge, expertise and resources to take on the task. 

In this article, we have sorted it all for you regarding what it takes to create a new cryptocurrency from its promotion to listing; everything you need to know is here; let’s begin. 

There are already thousands of cryptocurrencies in the market, as mentioned earlier. 

Introducing your cryptocurrency among existing cryptocurrencies must be backed up with a genuinely new or innovative idea that can somehow make your cryptocurrency “unique”. 

The fact is creating a cryptocurrency is the easiest part of the entire process. The most challenging aspects are maintaining and growing it. 

Before diving into the technical aspects, one should know the fundamental difference between cryptocurrency and tokens. 

Now, A cryptocurrency is an encrypted unit of information; This information contains the description of transactions. These units of information are called Blocks. Cryptocurrency has no centralised authority to regulate, such as banks or governments. 

Tokens can operate on existing platforms such as XRP, which runs on the Ripple network. Only specific projects accept tokens; on the other hand, a cryptocurrency can be used anywhere. 

Advantage of Cryptocurrency

• Minimal fraud risk
• Transaction Anonymity 
• Low Operation cost 
• Easy and immediate transactions 
• Readily available potential customers 
• Security of funds from Banks 

Build a blockchain to create a crypto coin.

There are four ways to create own cryptocurrency: 

1. Develop your own blockchain & native currency. 
2. Modify the code of an existing blockchain.
3. Set up a new cryptocurrency on an existing blockchain. 
4. Get a blockchain developer to create a cryptocurrency. 

However, in this blog, we will focus on the first method, i.e., developing your own cryptocurrency. 

It requires in-depth knowledge of coding and extensive technical training & experience to write code to create a new blockchain. 

A person must have a fundamental understanding of blockchain technology. Moreover, his codes must reflect a blockchain that can pave the way for a ” unique ” cryptocurrency. Here, Unique represents either that cryptocurrency solves an existing issue from the users’ perspective or offers a new viable option for the user to adopt. 

One must know that coins and tokens are two different aspects of blockchain technology. 

Coins have their own blockchains & tokens are digital currencies that operate on other networks. 

Steps involved in creating a blockchain: 

Select a consensus mechanism: A consensus mechanism is a protocol that a blockchain follows. It ensures that the participating nodes should agree with the legitimate transaction. There are plenty of consensus mechanisms to choose from: 

• POW (Proof of Work)
• POS (Proof of Stake)
• DPOS (Delegated Proof of Stake) 
• PBFT (Practical Byzantine Fault Tolerance) 
• DAG (Directed Acyclic Graph)

Choose a blockchain platform: There are a variety of blockchain platforms. To get a better idea of what platforms are out there, here is a list: 

1. Ethereum (market share — 82.70%)
2. Waves (WAVES)
3. NEMNxt (NXT)
4. CoinList
5. Hyperledger Fabric
6. IBM blockchain
7. MultiChain
8. EOS
9. BitShares 2.0
10. Chain core 

Node design: It is the basic unit of blockchain design. A node is an Internet-connected device supporting a blockchain by executing various tasks, from storing the data to verifying and processing transactions. Blockchains depend on nodes for efficiency, support, and security.

Choices to employ of the nodes 

1. Permission Type – Private or Public 
2. Selection of Hosting – Cloud or Premise or on both
3. Hardware details – Processors, memory, disk size etc 
4. Base Operating System – Ubuntu, Windows, Red Hat, Debian. CentOs 

Frame your blockchain internal architecture: You need to design and decide what parameters to put into architecture. Some parameters are permanent and irreversible. Consider all the parameters carefully: 

• Permissions of Data Access authority & authority to perform transactions, validate transactions and create new blocks. 
• Selection of Address formats to decide the look of your blockchain address.
• Key formats for generating the signatures for the transactions 
• Asset issuance to establish the rules for creating and listing all asset units.
• Asset re-issuance to develop the rules for making more units of the open assets.
• Key management to develop a system to store and protect the private keys granting blockchain access. 
• Multisignatures to define the amount of keys your blockchain will require to validate a transaction. 
• Atomic swaps to plan for the smart contracts enabling the exchange of different cryptocurrencies without a trusted third party. 
• Parameters to estimate maximum block size rewards for block mining, transaction limits, etc.
• Native assets to define the rules of a native currency issued in a blockchain. 
• Block signatures to define how the blockchain participants creating blocks will be required to sign them. 
• Hand-shaking to establish the rules of how the nodes will identify themselves when connecting to each other.

Interface Design: 

Communication is the key, and a well-thought-out interface ensures clear communication between your blockchain and its participants.

Here are the things to consider at this stage:

1. Web, mail and FTP servers
2. External databases
3. The front-end programming languages (e.g. HTML5, CSS, PHP, C#, Java, Javascript, Python, Ruby).

Auditing: Hire a blockchain auditor to review the blockchain. He will identify the vulnerabilities & give insights that you require to strengthen your design. 

Verification: Legal compliances are necessary before you mint any new cryptocurrency. Legal advisors confirm that your blockchain fulfils all the legal norms and regulations. 

Cost of creating a cryptocurrency: It depends upon the project’s magnitude, usability, and needs. It can cost anywhere between $2000 and $5000. 

Takeaway

Creating a cryptocurrency needs a tremendous amount of energy, money & effort. It also requires a wide range of tools, extensive knowledge & workforce to execute all the process steps. 

Having employed the help of expert developers, you will significantly lower your expenses in the long run by eliminating the room for errors, and, therefore, time and cost of the rework and updates; future-proof your solutions by working with the professionals who stay on top of all the latest industry developments and innovations, and free up your time for growing your business.