Cryptocurrencies are created through processes that combine technology, cryptography, and rules defined in software codes, usually based on blockchain or other forms of distributed ledger. The exact method depends on the type of cryptocurrency and its purpose, but I will explain the main creation pathways clearly:
Mining (Proof of Work - PoW)
- How it works: New coins are created as rewards for "miners" who use computing power to solve complex mathematical problems. These problems validate transactions and add blocks to the blockchain.
- Example: Bitcoin (BTC) is the most famous case. Miners compete to find a valid "hash," and the first to do so receives a fixed amount of BTC (currently 6.25 BTC per block, an amount that decreases over time due to halving).
- Details: The process consumes a lot of energy, and the issuance of coins is controlled by an algorithm that adjusts the difficulty and limits the total supply (in the case of Bitcoin, 21 million units).
Network Participation (Proof of Stake - PoS)
- How it works: Instead of mining, participants "stake" (lock) a certain amount of coins they already own to validate transactions and create new blocks. In return, they receive new coins as a reward.
- Example: Ethereum (after the transition to Ethereum 2.0) and Cardano (ADA) use PoS. The more coins you stake and the longer you keep them locked, the higher the chance of being chosen to validate and earn rewards.
- Details: It is more energy-efficient than PoW, and the creation of coins depends on the protocol's rules, such as inflation rates or fixed rewards.
Pre-creation or Initial Issuance
- How it works: All (or most) of the coins are created at once at the launch of the cryptocurrency, usually by the developer or founding team. These coins are then distributed via sales (like ICOs - Initial Coin Offerings), airdrops (free distribution), or reserved for future use.
- Example: Ripple (XRP) was created with 100 billion pre-mined units, of which Ripple Labs controls a significant portion.
- Details: Here, there is no continuous "mining"; the supply is fixed or gradually released according to the project's plan.
Fork of Other Cryptocurrencies
- How it works: A new cryptocurrency is created from a copy of the code of another existing one, with changes to the rules or characteristics. Holders of the original coin may receive the new coin proportionally.
- Example: Bitcoin Cash (BCH) emerged from a fork of Bitcoin in 2017, changing the block size to allow more transactions.
- Details: Creation depends on community consensus or a unilateral decision by developers.
Tokens on Existing Blockchains
- How it works: Many cryptocurrencies do not have their own blockchain and are created as tokens on platforms like Ethereum, Binance Smart Chain, or Solana, using standards like ERC-20. This is done through smart contracts that define the supply, rules, and functionalities.
- Example: Memecoins like Shiba Inu (SHIB) or stablecoins like Tether (USDT) are ERC-20 tokens on Ethereum.
- Details: Anyone with basic knowledge can create a token like this by defining the name, amount, and purpose in the code. Online tools even simplify this, but success depends on adoption and trust.
General Step-by-Step to Create a Cryptocurrency:
1. Define the Purpose: Will it be a currency for transactions (like Bitcoin), a token for an application (like gaming tokens), or something purely speculative (like memecoins)?
2. Choose the Technology: Create a blockchain from scratch (more complex) or use an existing one (like Ethereum).
3. Write the Code: Develop the software with issuance rules, security (cryptography), and consensus (PoW, PoS, etc.).
4. Launch the Network: Distribute the code so that others can participate (nodes/miners) and start issuance.
5. Distribute: Through mining, sales, airdrops, or forks.
Curiosity:
Cryptocurrencies like memecoins (e.g., $69420) typically follow the token model on ready blockchains. Someone writes a simple contract, defines an offer (sometimes absurdly high, like trillions of units), and launches it with a funny name to attract attention. The value comes more from the hype than from the technology. #criptomoeda