Businesses have now started exploring ways to create their cryptocurrency and use it to optimize operational efficiency and productivity. In this article, find out key technical and business aspects of cryptocurrency creation.
A Brief on Cryptocurrencies
A cryptocurrency is a blockchain-powered digital currency that uses encryption techniques to regulate the creation of additional currency units and verify transactions. Its key features are anonymity, decentralization, and security. Also, any centralized authority, government, or bank does not regulate or track cryptocurrencies. However, compliance with jurisdictional regulations is a must.
Blockchain refers to a decentralized peer-to-peer (P2P) network, which comprises of distributed data blocks. It is used as an underlying infrastructure for cryptocurrency creation. Now, let’s understand the types of cryptocurrency creation.
Difference Between Coins and Tokens
We can divide cryptocurrencies into two large subsets – coins and tokens. While both are cryptocurrencies, some significant differences make them distinguishable. Understanding their main concepts can assist you in making your own cryptocurrency for specific business needs easily.
A coin runs on its blockchain platform, where all transactions occur. For instance, Ethereum, and Neo operate on their blockchain platform. In this case, if you want to create your own cryptocurrency (crypto coins), you need to develop a blockchain platform first.
A token operates on top of an already built blockchain infrastructure. It is used to verify transactions and strengthen their security. We can also use tokens as smart contracts that can represent, from physical objects to digital assets and services. Essentially, anyone can create a new cryptocurrency using an existing blockchain infrastructure. We mainly us tokens for security token offerings (STO). STO enables businesses and startups to gather funds for their project idea through a crowdsale on a blockchain platform. Indeed, we can say that it is the primary reason businesses want to create their own cryptocurrency.
Benefits of Cryptocurrencies
Decentralization
The use of blockchain technology as the underlying infrastructure is one of the main arguments in favor of cryptocurrencies. It makes cryptocurrency independent from any central authority, and enable only crypto developers and owners to define the rules of governance.
Quick and Unrestricted Transactions
Generally, traditional currencies consume a significant amount of time and cost to be executed and settled. However, with cryptocurrency payments, businesses can execute numerous transactions at once and settle it immediately by sending it directly to users' crypto-wallets.
Cost-effective transactions
Financial institutions like bank levy significant charges for processing transactions. It does not mean that cryptocurrency transactions are free; the amount they require for processing is relatively low.
Global Adoption
Users sending and receiving funds can be anywhere in the world and still exchange cryptocurrencies. Businesses can save costs on currency conversion and bypass fees required for international funds transactions.
Anonymity and Transparency
It is because of the blockchain’s distributed nature, transactions being recorded on its database become immutable. Also, no one can know a transaction recipient and sender of the cryptocurrency if their address is not publicly confirmed.
These advantages of using your own cryptocurrency are sufficient enough to motivate businesses to invest in cryptocurrency development services.
Oodles is a cryptocurrency development company that provides a range of cryptocurrency development services. We have experience of more than 4+ years that enables us to build even the most complex blockchain and cryptocurrency-related projects.