The digital economy is flourishing in 2021. With conventional financial assets like bonds, shares, treasury bills etc not offering high returns to investors, they are turning to cryptocurrencies like Bitcoin and Ethereum. It offers several benefits like anonymity, freedom from the control of government authorities, round-the-clock trading, and quick processing of transactions. Are you an entrepreneur keen on the world of Web 3.0? Start Cryptocurrency development.
What is Cryptocurrency?
It is a decentralized currency that utilizes peer-to-peer (P2P) technology. Cryptocurrencies have plenty of use-cases and operate in an open-source manner. Moreover, holders can stake, swap, do margin trading, and invest in it easily across Decentralized Exchanges (DEXes) and Defi platforms.
Importantly, investors have real-time control over their funds. They receive real-time information about market capitalization, prices, and trading volume.
Since the emergence of Bitcoin in January 2009, the crypto industry has grown by several leaps and bounds. As per CoinMarketCap, there are 16193 virtual currencies and 451 exchanges today. Bitcoin (BTC) and Ethereum (ETH) continue to dominate the supply with a share of 40.5% and 20% respectively.
Are there any other popular virtual currencies? Binance Coin (BNB), Cardano (ADA), Solana (SOL), Polkadot (POL), Ripple (XRP), Litecoin (LTC), and Monero (XMR).
How do Cryptocurrencies function?
- There are multiple blockchains in the world. It comprises the likes of Binance Smart Chain (BSC), Cardano, Ethereum, Hyperledger, Solana, Polkadot, etc. All of the above-mentioned networks operate on distributed ledgers.
- Further, there are numerous consensus mechanisms like Proof-of-Stake (PoS) and Proof-of-Work (PoW), and Delegated Proof of Stake (DPoS). Moreover, every transaction requires authorization from the participants in the network. They have the freedom in authorizing or rejecting it based on mutual consent between two parties. Thus, blocks are added to the chain after a while.
- What do miners receive in return? They get rewards for mining every block. How can they claim this? It depends on factors like the supply of a cryptocurrency, time taken to mint every block, and the total energy consumption.
What is the step-by-step process to create a cryptocurrency?
Finalize the blockchain network – Blockchains and cryptocurrencies go hand-in-hand. Undoubtedly, there are multiple platforms like Cardano, Ethereum, Binance Smart Chain (BSC), Hyperledger, Solana, Tezos, etc. Moreover, there are different types like private, public, hybrid, and permissionless.
Decide the consensus mechanism
All blockchain networks in the world operate on a consensus mechanism. This determines whether a transaction would be accepted or not after a user initiates it.
Based on your business objectives, the level of energy consumption, and the competition in the market, you can choose options like Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof of Stake (DPoS).
Nodes are the backbone of all blockchain networks in the world. It assists in the processing of peer-to-peer (P2P) transactions and storing the data of investors. All the nodes are interconnected. Subsequently, this ensures real-time sharing of information.
You can collaborate with a cryptocurrency development company and decide whether it will operate online or offline depending on the business goals.
Build the Blockchain Architecture
Protocol development is a crucial part when creating a cryptocurrency. Before creating the mainnet, the testnet has to function perfectly. Moreover, techpreneurs like you must work out the types of permissions (access to data), address formats (regarding the wallet addresses), the formats of the keys (public and private), and the terms and conditions (T&C) for issuing new virtual assets.
Finalize the parameters
A lot of conditions have to be fulfilled before processing a transaction. You can fix it as multi-signature. Thus, investors have to use both their public and private keys for transferring funds. Further, smart contracts are pivotal while creating a cryptocurrency.
You can code the terms and conditions (T&Cs) in the pre-programmed software. Atomic swapping is an ideal option. This helps investors in transferring their crypto holdings from one wallet address to another without any assistance from any third parties. Ideally, you can fix limits for the block size, rewards to miners, and transaction limits.
Create the Application Programming Interfaces (APIs) – Creating a friendly user interface is a must for attracting investors. Likewise, a cryptocurrency development company will use state-of-the-art Application Programming Interfaces (APIs).
It shares data about virtual currencies on a real-time basis, executes functions like deposits and withdrawals, circulates notifications, and uses automated bots for handling trades like limit, market, and stop-loss orders.
Importantly, Software Development Kits (SDKs) of Flutter and the Remix Integrated Development Environment (IDE) are utilized to ensure multi-platform compatibility and monitor the functioning of smart contracts through deployment.
How are Multi Cryptocurrency Development Services highly advantageous?
Flexibility – Most blockchain networks allow investors to transfer assets seamlessly. Hence, cross-bridging helps traders to manage their portfolios effectively by shifting their crypto holdings based on the market conditions.
Highly secure – The rights of investors are protected with options like end-to-end encryption (E2E), multi-factor authentication (MFA), private keys, key vaults, and 12 to 24 recovery seed phrases. Thus, institutional and retail traders can keep a close watch over the inflow and outflow of their funds.
Low trading fees – With governments across the world increasing tax rates, cryptos have proved to be a useful alternative to hedging and high inflation. Holders can earn a huge fortune by investing strategically. Importantly, there are numerous blockchain networks and sidechains that ensure low gas fees. Thus, retail, as well as institutional traders can decrease their expenses immensely and pocket high returns.
Do you want to dominate the world of Web 3.0? Utilize multi-cryptocurrency development services by connecting with a white-label solution provider soon.