It might have been more than a decade ever since Satoshi Nakamoto introduced bitcoin. More than just the bitcoin Nakamoto also introduced or rather reintroduced a revolutionary technology called the blockchain.
More than a decade has passed since the introduction but the entire world of cryptocurrency has still and the entire world of cryptocurrency, true to its name, has evaded mainstream attention over into its apparent image of difficulty it has created. However, it might be surprising for a lot of people to know that creating your own cryptocurrency is probably one of the easiest technical tasks you can execute in the world of blockchain, and it does not require extremely extensive technical knowledge.
The different types of cryptocurrencies
Before We deep dive into the science of creating a new cryptocurrency, let us look one of the ways that the entire trip to the world is classified into two broad types – the one that operates on an existing blockchain and the other one that requires a completely new blockchain to be created from scratch.
If you were to take the bitcoin, it requires a completely different blockchain to function. However, cryptocurrencies can also be created to function on the top of an existing blockchain. For this purpose, one of the most preferred blockchains is Ethereum.
The entire code of the Ethereum blockchain is available on GutHub. It is open-source, and it only means that you can download it and customize it according to your requirements. It makes Ethereum one of the most preferred blockchains for most applications involving blockchains, including but not limited to smart contracts, decentralized applications, and even creation of tokens and currencies.
Understanding the difference between a currency and a token
In the crypto world, in most cases, both cryptocurrency and token have been used interchangeably. However, they are completely different from each other. The key difference between a currency and a token is that a cryptocurrency can be used as a medium of transaction. In simpler terms, you can use any cryptocurrency to pay for what you buy – like any other currency that you used today. A token, on the other hand, has only a limited validity defined within a specific ecosystem. It could possibly be used to buy something within the ecosystem but it might not have any relevance outside.
To make you understand better, a cryptocurrency is like your US dollar, and a token is like what you would have on your Starbucks card after you have loaded it. Can you buy your Starbucks coffee with dollars? Yes! Can you buy anything else with those dollars? Yes! Can you buy Starbucks coffee with the cash that you have at Starbucks card? Yes! Can you use your Starbucks card cash to buy anything else? No! We hope this sums up the difference for you between a cryptocurrency and a token.
Creating your own crypto token with ERC-20 standards
The term ‘ERC-20’ might not have had an introduction yet. ERC-20 is a standard in the Ethereum ecosystem. It presents one of the easiest methods to create your own cryptocurrency. One of the reasons it is extremely easy, in addition to the entire Ethereum ecosystem being extremely user-friendly, is that you do not have to go through the cumbersome process of creating your own blockchain.
A key aspect that governs cryptocurrencies and an integral feature of every blockchain is the concept of smart contracts. Smart contracts are conditional self-executing programs that are designed to keep up the integrity and security of every aspect of the blockchain. It is the complexity of these smart contracts that determine the difficulty that goes into creating your own blockchain or your own cryptocurrency for that matter.
Therefore, if you’re talking about a simple method to create your own cryptocurrency, in essence, we are talking about a simple smart contract that does not involve too many complex variables.
For simplicity’s sake, let us take the most basic case of any currency-updating balances, calculating deposits and withdrawals. In essence, there are only four methods to be implemented – checking of balances, creation of tokens, destruction of tokens, and transfer of tokens.
A cryptocurrency in Ethereum is as simple as a data structure that denotes the balances on each account and a series of functions to manage the balances.
Breaking it down…
What has been illustrated above is an example with the Ethereum blockchain and compliant with the ERC-20 standards. There are different blockchains and different standards that you can use to create your own cryptocurrency.
One of the most common ways of creating a new blockchain is a technique called forking. Using forks of some of the most common blockchains like bitcoin to create new cryptocurrencies have resulted in manifestations like the bitcoin cash.
Just because a technology backing something is extremely complex, it doesn’t mean that all the manifestations of the technology are essentially in the same level of complexity! Take your car for example. You might not know the intricacies that go behind creating such a stunning piece of engineering. However, even without knowing the head and tail of it, you could be an expert driver!
Such is the case with blockchain technology and cryptocurrency. Given the fact that cryptocurrency is looked at as one of the biggest game changes for businesses in the near future, it is important for business people to understand the basics of cryptocurrencies and tokens.
Any organization or any business leader who fails to keep up with the changing times and technology is bound to go down the long and dangerous spiral of becoming irrelevant and obsolete in this competitive landscape of business. Therefore, it becomes rather imperative on the part of businesses and business leaders to ensure that they are up-to-date with latest technologies like the blockchain and its manifestations like the creation of new cryptocurrency.
We understand that while the basics might be easy to learn, creation of a completely new cryptocurrency might be a cumbersome hassle. However, you can always get in touch with cryptocurrency development companies and they will help you create comprehensively new cryptocurrency with all the features that you will need. It will feature a full-fledged smart contract that will ensure that there are no lapses in its functionality or security. There are quite a lot of cryptocurrency development companies in India, the United States, and Malta which can surely provide the essential cryptocurrency development service that your business would require!