How do I create a new currency

Blockchain

How do I create my own cryptocurrency?

With increasing digitization, the importance and awareness of cryptocurrencies is also increasing. There are around 3,000 different cryptocurrencies, and the currencies are increasingly being accepted as a means of payment. But digital currencies also function as a means of payment in the Darknet. Bitcoin is the best known and most valuable currency with a market capitalization of around 10 billion US dollars. Ethereum, launched in 2015, ranks second at $ 1.5 billion. But how much technical know-how does it take to start trading with digital currencies?

To start the process, the latest version of the Ethereum Wallet (= Ethereum wallet) must be installed. This program is a multi-platform application that makes it possible to trade currencies based on Ether or Ethereum. Furthermore, the creation and execution of contracts can be realized. The next step is to create an Ethereum account. Most contracts cost less than a tenth of a US cent. If the program is only to be tested, it is advisable to select a test network and start mining. Within a few minutes, enough ether has accumulated to test the processes.

One problem in the test network is that the contract is not confirmed. The task shows in progress after an unsuccessful attempt to create the contract. The account finally has 0 ethers but should actually have more than 3,000. The solution to the problem lies in the fact that no mining can be implemented in a private test network and therefore no transactions are fed into the peer-to-peer network.

The Ethereum Wallet program only allows basic mining; a real network must be accessed for your own implementations. To do this, the user needs additional programs.

The often used AlethOne Miner is a simple program with two functions. In one method, mining is started and the second function is used to reward the miner. At this link you will find a collection of available Ethereum programs, mainly written in C ++. When creating smart contracts in a real network, the participant needs some ethers. You can get the ethers from a participant or exchange them for bitcoins. If the exchange is to be realized using Bitcoins, the fraud-proof "btcrelay project" can be recommended.

In order to create a contract, a token must be generated. Tokens can be any reasonable tradable good in Ethereum: coins, loyalty points, gold certificates, promissory notes, game items and so on. With all tokens, basic functions are usually implemented, this means that the token is immediately compatible in the Ethereum wallet. Because the same standard is adhered to with the other clients or contracts.

In order to realize effective mining, an estimate of the computational effort of the contract must be made and you can decide how much ether you are willing to pay. Ether that was not needed is sent back to the user. When creating a password, the user has to store a secure password and after a few seconds the transaction can be abandoned.

The main account shows that the user owns 100 percent of the shares that have just been created. To send money to participants, you choose which currency you want to send (either Ether or the newly created currency). Finally, you insert the address of the participant and execute the transaction.

Immediately after the data has been transmitted to the subscriber, the user will not yet be able to see the entire amount in his wallet. This is because the wallet only considers tokens that it knows about. Thus, the participant has to add this token manually. As a result, a contract must be drawn up with the help of the client. Since the contract is not very complex, the address can simply be copied and the set of rules created. Now insert the corresponding token and carry out the watch function (watch token). Now the token name, the symbol and the decimal number are inserted. Now you can watch how the balance between the token shifts and you can now send the tokens to everyone else.

Now the user has their own crypto token. Tokens themselves can be used for an exchange of value on local communities. In addition, there are also opportunities to exchange them for hours worked or points in loyalty programs.

The level of difficulty for creating your own crypto currency is limited and is also feasible for people who are not technically savvy. The software is set up in just a few steps and you can start trading and mining. One advantage of cryptocurrencies is that they are independent of banks, government currencies and payment service providers. However, there are also negative events, the most recent example being the Locky Trojan. This encrypts the hard drive and it is only decrypted against a payment of 0.5 Bitcoin. Would this event have also been possible without cryptocurrencies? If the goal is to make money through mining, this can only happen in the real network. However, mining is becoming increasingly unattractive, because the increasing difficulty (= the degree of difficulty of the cryptographic puzzle) requires better and faster hardware. Thus, the profit is always lower.

Summary

This article has outlined the technical framework of blockchain technology. First, a distinction was made between public, private and consortium blockchains. Various mining techniques were presented below. "State of the Art" is the proof of work, whereby the potential miner has to solve a difficult mathematical puzzle. The main disadvantage of this principle is the immense power consumption, which motivated the development of other mining principles. Finally, we took a look at the crypto currencies and showed the possibility of creating your own currency. (haf)