How does cryptocurrency work? How to make a cryptocurrency? How to create my own cryptocurrency? All these questions must be popping in your head. Don’t worry we have the answers for them. Keep reading to get enlighted with knowledge of cryptocurrency and how to benefit your business from it.
Before answering the $100 billion question (the total valuation of Bitcoin) of how to create your own cryptocurrency, there are a few things you need to learn about the future of money.
What It Is A Cryptocurrency? Basic Definition
First of all for let’s go back to basics. What is a currency?
It is far more than just a banknote or coins. A currency is a unit of storage and account and a means of exсhаnge. In simple terms, it is a universally accepted way of buying or selling any goods or services.
In older times, when the barter system was in place anything from rice and grains to wool and even feathers would be considered a currency. Then came in banks to regularize this means of payment. That’s when they made coins and printed banknotes.
Now in the digital time and age, the coins and banknotes seem to become outdated. So came in a new form of currency, the cryptocurrency.
Now, What is Cryptocurrency?
It is just like a normal currency but in a digital platform and accepted universally unlike physical currencies that work only in a specific country. A single centralized platform does not bind cryptocurrencies.
What It Is A Cryptocurrency? Advance Description
Cryptocurrencies don’t have banknotes, but they do have coins. There is also one more term, Token in cryptocurrencies. People often get confused between a token and a coin.
So What exactly is the difference between a Token and a Coin in Cryptocurrency?
The three main differences are:
- Coins are part of a single blockchain while tokens operate on the existing blockchains.
- Tokens are limited to a specific industry or community; coins can be used anywhere.
- Coins can buy tokens, but tokens can’t buy coins.
Let’s simplify using a real-life scenario. If you go to Starbucks regularly, then you may earn loyalty points for your frequent purchases. With these points, you can redeem a drink. These loyalty points are token that an establishment (in this case Starbucks) offers.
Now you can buy such loyalty points by giving money which in turn gives you free coffee. This money is the coin (in this case a real-life coin or bank note).
You can buy loyalty points using coins, but you can not get real money using loyalty points. So a crypto coin can be used to buy a business’s token, but you can’t buy a crypto coin using a token.
Starting a New Cryptocurrency: Is It Right for Your Business?
Now you have a fairly good idea what a cryptocurrency is and how it is used. Now comes the question, does your business actually need cryptocurrency? Just answer the questions below, and you will get a clear picture:
- Will your business be on the internet?
- Does your revenue come more from digital payments than hard cash?
- Will an online payment option increase your userbase?
- Do you plan to stay in business for more than a couple of years?
Okay, the last question was a rhetorical one. If the answer to all these questions is “yes” then your business needs a integrate cryptocurrency.
Benefits of building your Own Cryptocurrency:
- Eliminate Fraud Risk
- Transaction Anonymity
- Lower Operational Costs
- Immediate Transactions
- Access To New Customer base
- Security For Funds
How To Make A Cryptocurrency?
I believe now you are ready to create your own cryptocurrency. Without wasting any time let’s get straight to the step-by-step process to create and launch your own cryptocurrency.
Step 1. Choose a Consensus Mechanism
Consensus mechanisms are the protocols that consider a particular transaction legitimate and add to the block.
Step 2. Pick a Blockchain Platform.
The correct choice of blockchain platform for your business depends on the consensus mechanism you’ve selected. (I’ll mention the top blockchain platforms below for you to choose from)
Step 3. Design The Nodes
You have to decide the workings and functionality of your blockchain and design the nodes accordingly. For instance, will the permissions be private or public? The hosting will be on the cloud or on-premises, or both? What would be the required hardware details for the execution?
Step 4. Establish Blockchain’s Internal Architecture
Be sure about all the aspects before the launch as you won’t be able to change several parameters of the blockchain after it’s launched and running. The decisions could be as simple as what address format your blockchain will follow to providing exchanges between different cryptocurrencies without a 3rd party intermediary.
Step 5. Integrate APIs
Some platforms don’t provide pre-built APIs so make sure yours does. If it doesn’t still no need to worry, there are several 3rd party blockchain API providers like ChromaWay, Gem, Colu, Bitcore, BlockCypher, and Tierion.
Step 6: Design The Interface
Building a world-class cryptocurrency is of no use if your interface is not good. You need to make sure that the web, FTP servers, and external databases are of most recent and the front-end and back-end programming is done with the future upgrades in mind.
Step 7. Make Your Cryptocurrency Legal
Make sure that your cryptocurrency is prepared and abiding by the soon to become laws of international cryptocurrency regulations. This way your work is preserved and no sudden surprises can ruin your efforts in creating a new cryptocurrency.
Top Blockchain Platforms of The World:
- Ethereum (Market Leader With 82.70% Shareholding)
- Waves (WAVES)
- HyperledgerHosted by the Linux Foundation, IBM’s Hyperledger brings together various open source enterprise blockchain projects designed to assist businesses.
“>Hyperledger
Fabric - NEM
- IBM blockchain
- Nxt (NXT)
- HydraChain
- BlockStarter
- BigChainDB
- EOS
- Quorum
- IOTA
- CoinList
- MultiChain
- Openchain
- Chain Core
Best Cryptocurrencies That Made It Large: Success Stories
Bitcoin
Bitcoin has become the synonym of cryptocurrency so much that people use the word Bitcoin instead of Cryptocurrency.
Litecoin
Litecoin is often said the silver to Bitcoin’s gold. It is much similar to Bitcoin but has a faster block generation rate with faster transaction confirmation.
Ethereum
Ethereum is proud of the fact that it has provided a decentralized platform for smart contracts without any downtime, 3rd party interference, and fraud.
Final Word
Cryptocurrency is a very promising future in the glorious institution of currencies. If you plan to run a successful and growing business for a long future, you must start by putting the foundation for your own cryptocurrency in the present.
To create your own cryptocurrency like Bitcoin, you need a smart technology partner that has a good experience working with future technologies like these.