Where to start when creating your own cryptocurrency?
If you are thinking of developing your own cryptocurrency from scratch, the first thing you need to think of is business objectives. Once you understand the whole process, you can move on to create your crypto. The information below is your guide on every step in the developing process of cryptocurrency.
1. Definition of your business idea
For the success of your startup, people need to have a good reason for using your crypto. You should have a strong idea behind it.
- The product’s strong purpose will create loyalty and connect with users on a personal level. The best example of crypto with a powerful mission statement is Nona - feeless and fast digital payments.
You need to find your target audience as well as decide what you want to achieve. Maybe your goal is to create an empowering healthcare solution or provide effective and practical means for voters.
There are different guidelines on how to create a strong marketing strategy as well as make people interested in your cryptocurrency. When you are done with a value proposition, document it on white paper, along with the technology and methodology that you have used.
2. Consensus Algorithm
Consensus mechinism’s main goal is ensuring that all transactions are legitimate, and all nodes are synchronized. Talking about cryptocurrency, consensus algorithms of blockchain enables all participants of a network to agree on any transaction that should be added to the block.
What are the most common algorithms for blockchain projects? Proof of Stake (PoS), Proof of Work (PoW) or Delegated Proof of Stake (DPoS). But the best method is considered to be The Proof of Work (PoW) scheme.
In the PoW scheme miners (people who add new transaction data blocks to the system) have to solve mathematical problems using their resources and pass the data of clocks through a ‘hashing data’ for generating a ‘block hash’. This process is done to make sure the hash is correct and it matches the conditions.
3. Blockchain Platform
Your decision about the consensus method will determine which blockchain you will use for building your cryptocurrency. Here is the list of the top platforms for blockchain available today to help you decide which one is the best for serving your business needs.
- IBM blockchain
4. Design the Nodes
A program for validating transactions for security and efficiency is called a full node.
After selecting your blockchain platform, you can move on to designing the nodes, depending on their workings and functionality. Nodes are the infrastructure of a blockchain and are responsible for storing, creating, and spreading the blocks.
Here are some features you can design your nodes with:
- the nodes’ permission can be either public or private;
- cloud hosting or on-premise;
- selection of hardware details, such as the memory, disk size, and the processor;
- choosing a base operating system (Windows, Ubuntu, Debian, Red Hat, or Fedora)
5. Establish Your Blockchain’s Internal Architecture
Make sure you spend enough time on making your internal architecture of your blockchain the best that you can. When the platform is ready and launched, there won’t be an opportunity to change the parameters.
- think about the look of your blockchain address;
- define who can create, access, and validate new blocks;
- choose keys’ format;
- provide asset issuance rules;
- establish a management system for private key storage and protection;
- make a decision on the number of blockchain’s digital signatures required for verification of transactions;
- evaluate the block size, block reward, transaction limits and etc;
- create block signatures;
- plan for atomic swaps, allowing people to exchange different cryptocurrencies without an intermediary.
6. Integrate Blockchain APIs
Not every blockchain platform provides APIs, so make sure that yours does as it is very important. If your chosen blockchain doesn’t provide pre-built APIs, you still can have it integrated with a help of a third party.
Here are some of blockchain’s most popular APIs the development companies use:
- Colored Coin APIs
- Coinbase’s API
- Blockchain APIs
7. Designing the Admin and User Interfaces APIs
A well-designed intuitive interface allows users to have accurate communication and will add value to your startup. At this point of your development process, you need to ensure that FTP servers are compliant and secure, while the most recent version of external databases is used (e.g. MongoDB, MySQL).
8. Making your Cryptocurrency Legal
Regulations of cryptocurrencies help in monitoring the emerging digital currencies as well as provide clear rules for people, willing to make their new crypto coins legal. It is necessary to make your crypto legal to preserve your project and avoid legal problems.
9. Promote Your Project
When you have your startup off the ground, you will have to think about how to successfully market your product. To promote and maintain your crypto, do your research on popular channels that can help you to present your currency to the crypto community. Such channels are Reddit, Telegram, Twitter, Discord, Bitcoin Talk, etc. You can also use media and post press releases for attracting an audience and boosting your ranking.
Now that you come to the end of this article, you can start developing your own cryptocurrency. We also offer development expertise in cryptocurrency and cutting-edge integration from the line of blockchain services.