Blockchain Development: Can You Have Your Token or Coin?
Blockchain technology has shown the tech and business world the different and easier ways of doing things. Transparency and speed have been introduced. Middlemen are being bypassed. International exchanges are now easier to facilitate without governmental intervention. I’m sure you’re benefiting in one way or the other from what has been made possible by this technology.
Over the past few years, investing in blockchain technology has been dominating public debates. Contrary to what most people thought, there are many ways to invest in blockchain technology other than cryptocurrencies. Blockchain technology also involves companies offering cryptocurrency-related services (such as exchanges where you trade currencies) and companies building their blockchains for other purposes relating to their business or industry.
Therefore, you can invest also in either of those companies.
But what really is blockchain technology? How can you invest in it? What else can you do with blockchain technology other than buying and selling coins? What is the difference between a token and a coin? Are you one of those looking to investing in this technology but are scared because you’re not sure you have the expertise?
What Is Blockchain Technology?
Now, let’s remind you about what blockchain technology means. A blockchain is a database usually operated by a distributed and public (and recently private) network of participants. A blockchain built by individual companies is known as "permissioned" blockchain. Building blockchain entails the creation of public digital records of transactions (more often), certificates, or contracts that cannot be changed or deleted but can only be added to.
The whole idea is about using a "consensus mechanism" that will see multiple participants using cryptography to validate every new entry. By the way, cryptography is the science of encrypting or coding data. Participants don’t have to rely on a single entity to enter new information.
For that reason, no third party is needed. There’s no room or role for banks, regulators in blockchain technology since it’s a shared process secured by cryptography. That's why we say middlemen and intermediaries have been removed from the process. For that reason, it has created a framework that facilitates efficiency, transparency, and trust across participants and organizations.
Why Should You Invest in Blockchain Technology?
When you think about how blockchain technology has improved efficiency, transparency, and trust, you’ll see that that the technology has become a more attractive investment opportunity which you can’t afford to miss. Its applications are spread across a wide range of industries. Companies implementing blockchain tech in those industries will soon (or are already) gaining competitive advantages over their rivals.
Corroborating this, Hadyn Jones, an experienced blockchain market specialist says: "Using blockchain, organizations can build greater trust and transparency in areas such as the provenance of pharmaceuticals, food ingredients, or parts. Solutions can also be created that support commercial transactions, the issuance and trading of securities, and cross-border payments."
Another professional report gave an economic estimation of blockchain tech as having the potential to boost the global GDP by something close to $2 trillion over the next decade. Understanding this, investors are keying into the leading companies with the capacity to deliver most in those services related to blockchain. Also, remember that the absence of regulators and intermediaries has reduced costs and increased profits. So it can earn your business more revenue to raise your stock shares and the portfolios of investors.
Remember also that investing in blockchain may simply mean investing in companies that deal specifically with cryptocurrency and those that have invested in it. Since the performance of such companies revolves around the performance of cryptocurrencies in the market, there's a greater likelihood of an increase in worth in correlation with prices and values of coins and tokens.
Difference Between Token and Coin
Some investors are getting more confused and probably intimidated by the properties of coins and tokens. This is because the two terms are often used interchangeably even though they are hardly the same. Well, crypto, like any other field, has its own vocabulary. Thus, uncertainty is arising from the technical nature of crypto. For that reason, it's difficult to fully understand blockchain operability without a fairly decent amount of technical knowledge. But it can be broken down.
Summarily speaking, the main difference between tokens and coins is their construction. Note at this point that crypto coins have their blockchain independent of none other. That blockchain undergirding a coin functions independently. This is what actually keeps transactions verified and keeps the coin secure and subsequently gives it its value.
A crypto token, on the other hand, doesn’t have its own blockchain. Tokens are built on already existing blockchains. The goal is usually that a token should transform into a coin eventually. At this point, as the owner of the coin, you will have to develop your own blockchain on which your coin will be built and operate. Until then, however, your coin must dwell on an existing blockchain.
To break it down further, consider building construction. The house must have a foundation. That’s essentially what the blockchain is. A coin built on it needs a foundation to rely on but it doesn’t rely on another building. The blockchain is what holds the currency structure.
A token, on the other hand, is like an addition to an already existing building. You don’t need to pour a new foundation before adding another floor to the building. Its strength and stability depend on those of the coin serving as its base. However, some cryptocurrencies are powered by applications running on the Ethereum blockchain.
Perhaps the uses of the two can explain better the difference between coins and tokens. The value of crypto coins is inherent in their blockchain. This implies their exchangeability and tradability. This also means crypto coins are divisible into smaller units while maintaining their consistent value at a given time.
Consequently, crypto coins can be traded and converted into fiat currencies easily in fairly straightforward exchanges. Additionally, you can buy products and pay for services using those coins since they have corresponding fiat currency value.
As for the crypto tokens, the primary use is in initial coin offerings (ICOs). Therefore, it’s a way to crowdfund your new business's startup capital. You need blockchain like ETC, BTC, or BNB to create and launch your token. You can now invite investors to purchase and hold your tokens for future uses or trading when fully developed.
Some companies are using the funds raised in the ICO to kickstart their business operations. Holders of such token are in effect shareholders in those companies. When the company transitions its token into a coin, the token holders will subsequently convert their tokens into coins that take on all characteristics of coins in the regular crypto landscape.
How Can You Build Your Own Blockchain?
Did you know that you can create your token or coin? Don’t get scared! It doesn’t take an astronomic science. At any rate, that’s why we at Mikevicone Innovation are here for you. But before offering to go through the process for you, we would love to go all the way with you so that you can understand what it means to build your blockchain network from the ground, create your own forked-coin crypto, and use Ethereum, to create your cryptocurrency.
Building your blockchain from the ground up
Building your blockchain network from the ground up is not easy at all. It’s the toughest way to create your cryptocurrency. Remember that a blockchain network engages a complex system of unrelated computers that work in consensus to perform a task. You need to come up with a code that powers your blockchain in order to perform that task before you can convince a community of miners to support it.
You also need to see blockchains as distributed ledgers to be used for tracking values which are recorded and then transferred using native tokens. There must be users of your cryptocurrency for it to have any value. If your coin has no value, no miner will be interested in it. Your network will simply fall apart and will not be the best choice for businesses and individuals.
As developers are studying the challenges of the pioneer cryptocurrency, Bitcoin, with scaling, security, and consensus, they have tried to improve on the concept. Don’t get confused, you may not need to create your own from the scratch. You need to do so only if your blockchain network is going to be for your business, if you are a developer, or you intend creating a blockchain that will be on top of them all. At any rate, we can support you regardless of your status or goal.
Creating your own forked-coin cryptocurrency
This is a slightly simpler method. It requires that you use an existing blockchain in creating a new but nearly identical blockchain. Examples of forked-coin cryptocurrencies are Litecoin and Bitcoin Cash. LTC began as a copy of the BTC protocol but with increase transaction times because it has “lightened.” As soon as the code was ready, the developers launched the protocol. With that, Bitcoin miners could begin mining Litecoin as well.
Bitcoin Cash, on the other hand, began as a difference of opinion between miners of Bitcoin. At some point in mining when a certain block was reached, some miners in the blockchain decided to do things another way while the rest miners decided for a different way. This led to the development of another coin known as Bitcoin Cash.
Use Ethereum to create a Cryptocurrency
Ethereum is proof of how you can use a cryptocurrency to create another using a decentralized app, dApp, or smart contract. Ethereum is a second-generation blockchain and the native cryptocurrency is Ether. Most of the cryptocurrencies based on Ethereum follow the erc20 standard.
Making an erc20 token requires that you the creators form a “smart-contract” that determines how the new token will function and what it’s meant to do. Those instructions must conform to Ethereum’s best practices. The value of the new tokens created by the smart contract is determined in a number of different ways, but all linked to the new token's purpose.
Examples of Successful Builders of Blockchains
The cofounders of Ethereum are 8 namely Vitalik Buterin, Hoskinson, Gavin Wood, Anthony Di Iorio, Amir Chetrit, Jeffrey Wilcke, Mihai Alisie, and Joeseph Lubin. Of all these, only Vitalik Buterin is still actively working on the blockchain platform. Others have shifted their attention to something else on the blockchain or somewhere else.
The 8 cofounders in a meeting on June 7, 2014, in a rented house in the woods, decided to build what was to become the second-biggest blockchain in the world without signing any document.
Vitalik Buterin: The Russian-Canadian 19-year-old Vitalik Buterin was a computer scientist and Bitcoin Magazine writer.
Mihai Alisie: The Cybernetic Economics graduate was earning a modest living coaching and playing poker in Romania his home country when he heard about Bitcoin. He contacted Buterin in 2011 and the rest is history.
Anthony Di Iorio: The Toronto-born had family money he invested in marketing and ventures, precisely the geothermal drill business before Bitcoin grabbed his attention. In November 2012, he met Buterin and he was asked to become a co-founder.
Amir Chetrit: The Israeli-American Amir Chetrit, was pursuing a degree in computer science when he attended a Bitcoin business conference in Amsterdam in September 2013.
Charles Hoskinson: The Hawaii-born Charles Hoskinson had his eye on becoming a mathematician before becoming disillusioned with the career. His experience while being raised in Colorado has taught him how to raise money for a decentralized exchange. He quickly grabbed the opportunity to pursue the Ethereum dream and became one of the original co-founders. He was named the CEO in December 2013.
Gavin Wood: Amir Taaki and Johnny Bitcoin, the Bitcoin evangelist introduced Gavin Wood, the British computer programmer, to Bitcoin before he got in touch with Buterin with whom he struck the deal to write an implementation of Ethereum. Today, he considers himself the real founder of Ethereum.
Jeffrey Wilcke: This Netherlands-based computer programmer heard about Ethereum while working on Mastercoin, the first ICO. He wrote it first in Google’s Go language before renaming it Go Ethereum.
Joeseph Lubin: This is the most experienced of the cofounders. A 1987 graduate of electrical engineering with a diverse career in software engineering, business, and music became interested in crypto and contacted fellow partners to become Ethereum's cofounder.
Charles Hoskinson: After his brief stint with Ethereum, Hoskinson started experimenting with Ethereum Classic as a rival blockchain which was born out of 2016 Ethereum’s controversial hard fork. After launching Cardano which rose to become the sixth-biggest cryptocurrency by market cap, he keeps rolling out new blockchain upgrades.
The two renowned crypto gurus, Jed McCaleb and Chris Larsen were the brains behind Ripple and its XRP token. McCaleb owned a part of the ill-fated Bitcoin exchange Mt. Gox while Larsen had been a Silicon Valley entrepreneur who founded e-Loan, an online mortgage platform in 1996. Investors in Ripple now included Accenture, Andreessen Horowitz, Santander, and Standard Chartered among others.
Jackson Palmer: With the help of Billy Markus, Palmer founded Dogecoin like a joke on Twitter. The idea was to make cryptocurrencies more fun and approachable.
You can see that these founders and cofounders are from common backgrounds. You don’t need to be special to build your token and coin. If those folks can successfully do it, you too can do it.
Talk to us about your idea, goals, and challenges along the line. We shall be willing to assist you in building your own blockchain.