Cryptocurrency is a new word for most people but most people already know about Bitcoins. Bitcoin is basically a type of cryptocurrency which is a digital currency you can own, trade and profit from. They are digital tokens which are based on cryptographic functions. It has no physical form and is only a series of encrypted bits which are stored on peer-to-peer networks and transmitted through it. There are different types of cryptocurrency just like the national currency of different countries. A cryptocurrency is created using different functions which have certain values based on the date it was created, number of users, transaction volumes and extent of network. Bitcoin is the gold standard and it is the reserve currency in the world of cryptocurrencies. There are other cryptocurrencies such Ethereum, Litecoin and etc.
How it is Created?
Creating a new cryptocurrency is very easy and those who know the basics of computer programming can accomplish it. Most platforms are open source hence the existing source codes are available for modification. They can be used to build a new cryptocurrency. The developer can choose their own algorithm using the respective source code. Those who have no coding experience can use online services to create a cryptocurrency for free where it is hosted and maintained as well.
Wallet Builders and Cryptolife are some free services that can be used to create a new cryptocurrency. The important part is to have a growing network of users that contribute to the processing and take part in transactions associated with this new altcoin. The biggest challenge when it comes to cryptocurrencies is gaining adoption. If the altcoin is not adopted then it is effectively worthless. Most cryptocurrencies are built on a particular idea and encourage solving some of the existing problems in society. If people do not use a certain cryptocurrency then it will become extinct. Therefore a considerable amount of time, effort and resources are required to help a cryptocurrency become adopted and gain enough traction.
Once the altcoin has gained popularity and is involved in a large number of transactions it can be listed on exchange networks. The exchange of cryptocurrency allows users to buy or sell the new altcoin using trading pairs. Trading pairs are other types of currencies or even fiat currencies which are spent to buy the new altcoin through exchange. Once all the factors mentioned above are met, the cryptocurrency can be used for its intended purpose.