Cryptocurrencies are a type of currency that is characterized by decentralization and is based on encryption instead of being linked to centralized banks. In this article, we will be talking about cryptocurrencies and how they work and give some information about the creation of digital currencies.
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Cryptocurrencies What are they?
cryptocurrencies are based on the idea of investment (similar to stocks to some extend), as it provides the option for the investor (who sees a future for a cryptocurrency) to buy it at a low price and then sell it at a high price when the currency succeeds (the success of the project). As a result, quick amounts of money are also provided to project owners (cryptocurrencies creators) - through the so-called initial coin offering- instead of the need to raise money in the traditional way to start the project . Some of the famous digital currencies: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, Steller
Bitcoin
Bitcoin started in 2009 as the first digital currency on the Internet as an open source software, mainly it is based on blockchain technology and was created as an idea to get rid of the association of currencies with banks so that it lives completely on the Internet, which means that it does not have a physical form like traditional currencies . One of its distinguishing characteristics is that the number of bitcoins in the world cannot exceed 21 million bitcoins only.
There are only two ways to get bitcoins:
1- You can buy them from someone who already owns some.
2- You can become a miner and mine new bitcoins by solving very complex equations (using computers with certain specifications and high computing capabilities).
Blockchain
Blockchain is a private database, distributed over several storage points (Distributed Ledger) and not on a single server, and the information on it once it is written, cannot be erased and there are no rights to modify or edit it. In other words, when new PC is added to the blockchain system, the entire database is downloaded to this device, and every transaction that takes place in the Cryptocurrency is recorded in all the devices connected to the blockchain.
Each cryptocurrency user has two keys:
1- Public key and a private key. The public key is known to all devices in the blockchain and is used as the user's address.
2-Private key is only known to the user and used to open the operations of buying and selling the Cryptocurrency .(which is known as cryptography).
Creating my own Cryptocurrency
How to create cryptocurrencies ?
Your cryptocurrency can be created in multiple ways, in general the methods can be divided into two main categories:
1- The programming way: It is the most difficult, but it provides high flexibility and a large area of control over your cryptocurrencies . This is done by copying the Bitcoin code (since it is open source) and then modifying it, you must have a good knowledge of C++ to do so.
Note: You can find the code online.
2- The service paid by websites: a method that shortens most programming for you, but it is for a fee. Examples of service providers: walletbuilders | Cryptolife | Coincreator | Ethereum.org
Challenges of creating your own Cryptocurrency
There are many challenges of creating your own Cryptocurrency, and this is evident by noting that most Cryptocurrencies that are created fail and lose their value. Some points must be taken into account before making a digital currency in order to avoid catastrophic failure, including:
1- The Cryptocurrency is a long journey of diligence and striving for improvement and development, and not just an idea that you created and threw.
2- Time should be taken to determine some data before starting to create the currency, such as: How many currencies are available (is there a certain limit for the currency?), Do you want to add any verification method for the currency and its operations? What is the level of privacy for the coin? Is the currency specific to a specific category or is it general? , What is the hash algorithm to be used? And what is the block size?
3- Security: Security is always a concern in digital cryptocurrencies, and therefore software solutions are required, follow-up and update on them permanently is required, which means material costs and time will be consumed.
4- Development, adding and deleting some features according to the needs of the community in your currency, which means material costs and time will be consumed as well.
5-Marketing the digital currency and alerting buyers to its existence and encouraging them to buy it is one of the biggest challenges of the digital cryptocurrencies due to the large number of competition and cryptocurrencies.
6- Create and maintain your own cryptocurrency community and enthusiasm for the coin.
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