Cryptocurrency is a digital currency that does not have notes like banks do. They consist of coins. Coins are often confused with tokens. Before we continue, it is crucial to know the difference between them.
Tokens Vs Coins
- Coins only operate on their blockchain. Meanwhile, tokens can run on the existing blockchain.
- Tokens have limited use comparatively, often used for only projects. Coins have a broader use.
- You can use them to buy tokens, but tokens cannot be used to purchase coins.
To build a coin, you must create your blockchain first.
Step 1: Choosing mechanism and blockchain platform
A consensus mechanism will help run the blockchain smoothly. It acts as a protocol that enables transactions to get verified and qualify to get added to the block. There are plenty of options available. You should go for the one which fits your goals and objectives. The Proof Of Work (POW) is a common example. Bitcoin and Litecoin use this consensus algorithm.
The next step that is the blockchain platform will depend on your mechanism algorithm. Etherium is one of the prime example which is leading the market with over 82% shareholding.
Step 2: Designing nodes and building architect
Nodes are an important aspect of creating blockchain. They perform a similar work brick does for a wall. Nodes assist in transactions, store data and perform various tasks. The security of the blockchain depends on the nodes. Before making a choice, you first need to consider if blockchain will be public, private or hybrid? What would be the hardware required? Will it be hosted on cloud, on-premise or both?
When designing the internal architect, the designer should be careful as some parameters cannot be changed once a blockchain starts operating. Make sure to consider the adequate guidelines before making a design.
Step 3: Integrating APIs
Few platforms do not come with the API, so make sure to design it. However, the majority of the platform provides pre-built API for the designer. Some examples are Chromeway, Bitcore and Coinbase API.
Step 4: Designing the admin and user interface
Without a good interface, designing a cryptocurrency is useless. It helps the blockchain and its user to communicate and interact with each other. Make sure the web, mail and FTP servers are up-to-date.
Step 5: Final check
Before proceeding, make sure the cryptocurrency is abiding by the law of International cryptocurrency regulations. Any wrong decision or carelessness can cause it to get banned and removed from the internet. These sudden surprises may cost you plenty of time and money.
Be 100% ready before you launch your cryptocurrency.
The work does not stop after you make your cryptocurrency, it requires you to adapt and update with time. Cryptocurrency has a bright future. No one knows your cryptocurrency outperforms others in the market.
Litecoin is one of the prime examples that is giving bitcoin a tough time. It is regarded as silver to bitcoin gold. Although it is very similar to BTC, it provides faster transactions that make people invest in it. Your cryptocurrency should serve something new or better to be successful. If not, it will lack investments and be worth nothing.