The key is “a necessity”. There should be a problem finding or creating a tool to overcome the problem, so the number one reason has a rational reason to spend time, money, and other resources to launch and maintain the whole system.
If we suppose a team has a good reason to launch a cryptocurrency.
The new project team needs some critical infrastructures to achieve the minor requirements of launching their cryptocurrency based on an already created blockchain network or launching a new blockchain network. It turns out the process can be a complicated, time-consuming legal juggernaut with a high failure rate for investors and creators.
To Write a Whitepaper
A whitepaper is a document released by the crypto project development team which explains the technology and purpose of the project. It describes how the cryptocurrency is conceived to invest in the newly launched crypto and defines its purpose. A crypto whitepaper includes different forms of data like statistics, charts, and mathematical formulas. This data aims to persuade future investors to invest in that cryptocurrency.
The advantages of Blockchain
A few practical advantages of blockchain are
- Smart Asset Management suitable for businesses like exchange, retirement, issuance, or payment services can use blockchain effectively as it requires asset management.
- Smart Contracts are a way to automate operations and ensure legal bindings in digital codes. If a business can use it, it might be an excellent possibility to go with blockchain.
- Data Verification & Authentication Blockchain works seamlessly with digital signatures, immutable storage, and encryption. So, if a team wants to work with data generated using transactions, blockchain is a good choice.
Minimum Requirements to Launch a New Cryptocurrency
Please remember to launch a new cryptocurrency; one necessity is choosing the best available blockchain network that best meets requirements. In some cases, the team needs some options to support their native crypto, in which writing new codes for a new blockchain is inevitable.
The team should investigate the case carefully and pay attention enough to the problem they want to solve from financial, technical, and structural views. According to Investopedia.com, more elements are necessary to launch a cryptocurrency successfully, which are including:
Choosing a Consensus Mechanism
A Blockchain Operating Protocol (So-called Consensus Mechanism) is necessary (e.g., Proof of Work in Bitcoin blockchain, Proof of Stake in Ethereum blockchain, or Proof of Space in Chia Blockchain).
Use, modify or design a good structure for the blockchain network.
– Use an existing Blockchain network
First, the project team can survey different available blockchains and use them as the network they want to issue their new cryptocurrency.
– Modify an existing blockchain
The team project can use the source codes of an already existing blockchain to create a new blockchain according to the needs of their cryptocurrency. With a good knowledge of the team’s future cryptocurrency, they should decide how they want to design the blockchain structure, which is divided into two main sections:
– Design a new Blockchain and its source codes
- Public (open networks available to everyone to participate in the consensus process blockchains used to validate transactions and data).
- Private (a distributed ledger that is not publicly accessible).
Verify Legal Compliance
Now the project team can decide how to mint their new cryptocurrency. How many coins or tokens will issue initially?
There are two options. They can also mint the new cryptocurrency in a complete supply or gently increase the coin supply as participants mine in that blockchain ecosystem.
A Network of NODEs
After selecting a consensus algorithm and the platform, it now turns to design the nodes. Generally, the project team can approach blockchain network creation in many ways.
They can create a “Permissioned network” that we have described above, a closed network that requires strict KYC rules for nodes to join. On the other hand, there is a permissionless network which is essentially a public network. Here, anyone can join the network and take advantage of what it offers.
Most of the time, a business requires “Permissioned Networks” as they do not want to share vital information with everyone out there. Also, a “Permissioned Network” can help share information with the public.
Once a project team has decided on it, they need to determine where they run those nodes.
The last point is that they also need to design the operating system of the nodes. The team can go with the free Linux operating systems such as CentOS, Fedora, Debian, or Ubuntu. If they are not comfortable with Linux-based OS, they can also choose Microsoft Windows as the operating system for your node.
Now that the team has its blockchain, which is properly running, it is time to manage the application programming interface (APIs). Many pre-made APIs depend on the platform that meets the team’s needs and is already chosen. Please remember that some platforms might not offer APIs at all.
To Create a Blockchain Model
At this stage, the team needs to create a Blockchain model. this instance must best fit the blockchain the project team has chosen for the crypto, whether they use, modify, or design a new blockchain for their proposes.
Now the team can configure various parts of the instance, including the asset issuance, permissions, key management, and more.
This step is very crucial. This step is critical, and the development team must do its best to design the model perfectly.
Application Programming Interface
After designing the blockchain model and working correctly, it is time to manage another critical step: the application programming interface (APIs). However, there are many pre-designed APIs, and the only thing the team should do is choose one of them, but sometimes, some platforms do not deliver proper APIs.
According to 101blockchains, there are several steps to design an appropriate API for their project.
- Perform audit-related functions
- Generate key pairs and addresses
- Data retrieval and storage
- Data authentication using hashes and digital signature
- Smart contracts
- Managing the smart-asset lifecycle management, which includes payment, issuance, escrow, exchange, and retirement
Administrate the Network and Manage the User’s Interface
To administrate the interface, the project team needs to provide as much information as possible to the admin while ensuring that they do not overwhelm the interface with unnecessary details.
For users they can decide to showcase the essential things only. Suppose the team has chosen a public blockchain network. In that case, they possibly can pick to show them some information like KYC information, their status with the network, their roles, and other vital information.
The project team can use any available front-end programming languages such as HTML5, CSS, C#, PHP, JavaScript, Java, and so on!
Finalizing
In the end, the team should ensure that the system is working correctly. The monitoring should be continual. There must always be an eager interest in improving the blockchain network or adding more technical details to the network on the project is standing and working on basis.
Conclusion
For sure, designing, preparing, making a blockchain instance, mint, and launching a cryptocurrency is not that easy to be explained in a few lines. This paper tries to show the skeleton of this high-tech financial approach to people interested in knowing the alphabet of minting a new cryptocurrency. Except that the core team should be professional, a professional crew should mentor the team or maintain the project nonstop.