What Exactly Is Cryptocurrency? Understanding the Basics

Let’s start with the basics. Currency – what is it?

Well, there’s far more to a currency than being just a coin or banknote. It serves both as a means of exchange and a unit of storage. And yeah, you may also call it a method of buying or selling that’s accepted globally.

Back when barter systems operated as the order of the day, anything from grains and rice to feathers and sometimes wool would be regarded as a currency. Banks then came in to standardize these methods of payment. They began printing banknotes and minted money.

As we move into a digital age, banknotes and coins seem dated. So new forms of currency, called cryptocurrency, then emerged.

Now, what’s Cryptocurrency?

It’s much like a regular currency, but it’s not held physically. Unlike national currencies that work only in a particular country, it is digital and acceptable in any part of the world.

Any single centralized platform does not bind cryptocurrencies.

Creating a new cryptocurrency: What do you need to know?

Now you know what a cryptocurrency is and how exactly it works. The following significant question to ask is: Is cryptocurrency necessary for your business?

You’ll get a clear, perfect picture if you answer the following questions:

• Is your business going online?
• Do you receive more revenue from digital payments than from hard money?
• Can you increase your clientele by offering online payment options?
• How long do you plan to be in business?

Okay, that last question was merely rhetorical. If you answered “yes” to other questions, then your business needs cryptocurrency.

Now you’re set; it’s time to take the bull by its very horn. Brace up and let’s get right down to the business of creating and launching–your cryptocurrency needs to thrive!

Step 1. Decide on a consensus mechanism

A consensus mechanism is a protocol that considers a transaction to be legitimate and gets an addition to the block.

Step 2. Choose a blockchain platform

You should pick a blockchain platform that corresponds to the consensus mechanism you’ve chosen for your business.

Step 3. Create the nodes

It would help if you decided how your blockchain will work and function and then design nodes accordingly. For example, will permissions be public or private? Will hosting take place on-premises or on the cloud or both? What hardware details are needed for the execution?

Step 4. Establish the internal architecture of blockchain

You won’t be able to change the blockchain parameters after it has been launched and is running, so be sure to confirm all details before about all aspects before launching.

You could make several choices, from what address format your blockchain uses to the possibility of providing exchanges between different cryptocurrencies without involving a third party.

Step 5. Ensure API integration

Be sure your platform provides pre-built APIs, as some don’t.  But even if it doesn’t, don’t fret. Like Gem, Bitcore, Colu, Tierion, and BlockCypher, several companies are third-party providers, and they offer blockchain API.

Step 6: Create/design your Interface

According to Bitcoin Rush, building a high-end cryptocurrency is useless if your Interface is not user-friendly. You should ensure that all web, FTP, and external database servers are up-to-date, and the front-end and back-end programming is done to accommodate future upgrades.

Step 7. Ensure your Cryptocurrency is Legal

Prepare your cryptocurrency to comply with the laws of international cryptocurrency regulations, which are soon to emerge. This helps to preserve your work and keep your dreams of creating new cryptocurrencies a reality.