With block chain technology witnessing advancement, more and more people are taking an interest in how to develop cryptocurrency. There are many ways of doing it. However, let’s first have a look at more details about the cryptocurrency.
What is cryptocurrency?
A lot is being spoken and interpreted about cryptocurrency. While for some, it is a new form of money, for others, it is no more than a fad. In reality, cryptocurrency is a decentralized digital currency that makes use of encryption techniques for regulating the generation of currency units and verifying the transfer of funds. Cryptocurrency is known for anonymity, decentralization, and security. It is not tracked or regulated by any government, centralized authority, or bank. Block chain, which comprises data blocks and is a decentralized P2P network, is an integral part of cryptocurrency.
How does cryptocurrency work?
Block chain is an integral part of cryptocurrency. Distributed ledger technology is built on consensus algorithms regulating the creation of new blocks. All participants of the P2P network need to accept a block for it to be registered in the block chain. There are many types of consensus with power-of-work, power-of-stake, delegated-proof-of-stake, and proof-of-authority.
Every time a new block is created, cryptocurrency is issued and used as a reward or incentive for the block chain participants taking part in the consensus mechanism and closing blocks. The crypto holders can transfer the cryptocurrency assets between wallets and block chain addresses, exchange it for fiat money, or participate in cryptocurrency trading. While people’s identities behind the public addresses remain anonymous, everyone on the network can view the transactions.
Ways to develop cryptocurrency
- Create a coin
For creating a coin, you need to be an experienced professional in decentralized technologies or have someone to guide you. The process might take just 5 minutes. You can simply copy the code of Bitcoin, add a new variable, or change the value of something. And that’s it; you will have your block chain and coin. But you need extensive coding skills to understand the code and to change it.
Another struggle can be maintaining, supporting, and promoting the coin, as you need to create the whole logic of block chain for launching your coin. You can hire professionals to manage it for you. If you have the required budget, you can go ahead with it.
- Create a token
This is a feasible way of creating a cryptocurrency. While you have complete control over the block chain, but it can also have drawbacks like increased development time, a significant sum of expenses, and more. Fork cryptocurrency is created on top of an existing block chain by utilizing the trust, popularity, and consensus mechanism of the underlying technology.
When you create a token on the top of a strong block chain, like Ethereum, your token runs on a secure network protected from fraudulent attacks. Token creation is less costly in terms of money and time because you use decentralized architecture and implemented the consensus mechanism.
While there are many ways of following the steps and making cryptocurrency, only professionals can help choose the best stack of technologies and complete the process in time.