Getting hold of Bitcoin often involves costly mining operations, and hence many have instead chosen to create their own cryptocurrency. Even if you are not a large company such as Facebook, which is in the process of launching Libra, creating a cryptocurrency is not a big undertaking. Below we look at how individuals can create their own cryptocurrency,much like how Bitcoin was launched in 2008 by a mysterious figure or group of people named Satoshi Nakamoto. We also look at how Bitcoin has influenced other cryptocurrencies that have been created over the years.
Get the technical expertise required
As the interest in cryptocurrencies has surged, they are increasingly being used for everything from purchasing of groceries to cars. However, creating a cryptocurrency is a whole new process which can pose problems to those who have no technical knowledge. So once you decide to create a cryptocurrency of your own, it is ideal that you tie up with a person with technical expertise in the area. There are also several courses that delve into how to create a cryptocurrency. People often sign for these courses if they want to learn the nuts and bolts process of launching a customized cryptocurrency.
Decided whether to use a blockchain platform that is pre-existing
With technical experts giving you ideas, you can decide whether you wan to go ahead and build your own blockchain or use and existing platform such as Ethereum. Importantly, picking from one of the existing blockchain platforms gives you access to the functionally that they have. However, people who are part of a group or company can easily build a blockchain from the ground up, especially if they have expert coding skills. Alternatively you can tie up with a company that provides blockchain services and they will set up a cryptocurrency that is specifically tailored to meet your business needs.
Pick a consensus mechanism and design nodes
Integral to the operation of a blockchain used in a cryptocurrency is the consensus mechanism. Therefore due attention has to be paid to the selection of consensus mechanism protocols that the nodes will use, to check if a transaction is authentic or not. The design of the nodes is also important as they form the supporting structure of a blockchain, and each needs to perform various tasks. These tasks range from the verification of data to transaction processing. Additionally, care has to be taken to get the correct hardware necessary for the nodes which then can be hosted on the cloud.
Lay guidelines that govern the architecture of the blockchain
Creating the guidelines that govern the architecture of the blockchain is a tricky process, and one that you cannot change down the line. So when setting up a cryptocurrency you need to spend time and get the permissions, address formats, parameters and more right the first time round. This is also a good time to check if a pre-built API is included with the blockchain platform that you are using. Then look into designing an interface, which the user and the admin can use easily when working with the blockchain.
Legalizing a cryptocurrency that you created is an important step especially if you are looking to conform to the latest laws and regulations that govern such currencies. With a solid cryptocurrency that meets regulations you can overcome many hurdles that come with traditional currencies, while decreasing risks of fraud.