7 Step Method to Make Your Own Cryptocurrency
With more than 4000 cryptocurrencies listed on the Forex exchange, it is undeniable that the future is brighter for decentralized currencies and their founders.
Thousands of people around the globe are looking to make their own cryptocurrency to enjoy profits while the digital currency industry is skyrocketing. Many of them manage to establish a system for their cryptocurrency, but there is a lot of work required to seal the deal and ensure profitable growth. So let's jump in and learn how to make your own cryptocurrency in seven easy steps.
Before getting to the steps to make your own cryptocurrency, you need to know the difference between coins and tokens.
- While crypto coins like Bitcoin exist on their own blockchain, tokens operate on existing blockchains, like the Basic Attention Token operating on Ethereum's technology.
- Tokens are limited to being used within an organization, while coins can be used outside a single community.
- Coins can buy tokens, but tokens can not buy coins.
COPYRIGHT_WI: Published on https://washingtonindependent.com/ebv/methods-to-make-your-own-cryptocurrency/ by William Willis on 2021-12-15T00:32:38.844Z
To simplify, You can buy groceries at a superstore for which you may be rewarded points. Later on, you can redeem the points in exchange for a product only from the same store. Now, the coins are equivalent to the money you use to buy groceries, and the tokens are the points you can redeem in exchange for products.
The process of making a functional cryptocurrency is broken down into seven steps.
A consensus mechanism is the process of all the nodes confirming a transaction for it to go through. This is also known as "achieving consensus." You will need a mechanism that involves a protocol on how a particular transaction goes through a network. There are many different consensus mechanisms, including Bitcoin's proof-of-work mechanism and many more.
Blockchain is a system where coins or tokens exist. Choosing the blockchain is a crucial step, and it depends on the consensus mechanism that you have chosen. There are three ways to decide on a blockchain.
- Creating a new blockchain
- Forking a blockchain
- Using an existing blockchain
You have to decide how your nodes will function according to your blockchain. Nodes are the backbone of your cryptocurrency. They involve deciding whether the blockchain is private or public, the hardware specifics required for execution, etc.
As a cryptocurrency creator, you must be sure about the design and functionality of your blockchain. Once the parameters are launched, the major building blocks can not be changed and may cause collapse if not properly tested beforehand.
While many platforms do not provide a pre-built Application Programming Interface (API), make sure your cryptocurrency has an API that helps it stand out and increase popularity. There are several 3rd party blockchain APIs that can help you with it.
Designing a good and efficient interface is important to boost the chances of your cryptocurrency being among the top. Make sure that the web, FTP servers are up-to-date and the front and back-end development is done with future upgrades in mind.
Last but not least, do extensive research on the existing and upcoming laws for digital currencies so you can establish your cryptocurrency within those laws to avoid any mishaps that could ruin your efforts. It is best to consult experts to rule out anything that could hinder your coin's development.
Cryptocurrencies have a promising future, with the global market value crossing $3.3 trillion. You can claim a chunk of that amount by making your own cryptocurrencies by following these seven steps. You can find loads of information about crypto at bitcoins-era.com to help you build a solid foundation of cryptocurrencies before you put anything at stake.