How do i create a cryptocurrency

JavaScript might not be the best language to create your “production-level” cryptocurrency, it will still manage to give people like web developers introduction to this space quickly.

Requirements

  • Node.js installed on your machine
  • A code editor (I prefer Visual Studio Code)
  • Working knowledge of Node

You can always refer to the GitHub repository if you want to have a look at the code.

Getting started making your JavaScript cryptocurrency

Let’s get started by creating a Node project. Navigate to a safe directory and enter the following command to create a new project:

npm init -y

This should generate a package.json file for you. If the file is created, then the project is created.

Now let’s create a new file called index.js. First, import the crypto package so that we can deal with hashes in our project.

How do i create a cryptocurrency

Each crypto wallet has a pair of keys: a public key and a private key. The private keys are used to create new transactions (e.g., send cryptocurrencies) and the public key is used to verify them and receive cryptocurrencies.

Let’s first set up the constructor so that we can generate a key pair as soon as the wallet is initiated:


constructor() { const keys = crypto.generateKeyPairSync(“rsa”, { modulusLength: 2048, publicKeyEncoding: { type: “spki”, format: “pem” }, privateKeyEncoding: { type: “pkcs8”, format: “pem” }, }); this.privateKey = keys.privateKey; this.publicKey = keys.publicKey; }

Here, we are using the PEM format for the keys. It is a well known format and can be saved on the user’s PC.

How do i create a cryptocurrency account

The RSA algorithm allows us to create public and private keys.

Now let’s create a function that will help us to send cryptocurrencies to other wallets on the network:


send(amount, recieverPublicKey) { const transaction = new Transaction( amount, this.publicKey, recieverPublicKey ); const shaSign = crypto.createSign(“SHA256”); // add the transaction json shaSign.update(transaction.toString()).end(); // sign the SHA with the private key const signature = shaSign.sign(this.privateKey); Chain.instance.insertBlock(transaction, this.publicKey, signature); }

In the above code, we take amount and recieverPublicKey as parameters and create a new object from the Transaction class using that information. We then create the hash of the transaction and sign it with the private key.

How do i create a cryptocurrency wallet

It’s a digital token issued by that country’s monetary authority like the Reserve bank of India.

Central bank digital currencies are of two types. Wholesale and retail.

Wholesale CBDCs use the existing banking and financial institutions to settle transactions.

A digital ledger-based system enables certain conditions. So, a transfer won’t occur if these conditions are not satisfied.

Retail CBDCs involve the transfer of central government-backed digital currency to consumers.
They drop the risk of institutions becoming illiquid and sink depositor funds.

Creating cryptocurrency is accessible now for any organization.

How do i make a cryptocurrency

Every transaction relates back to unique cryptographic codes that secure the network.

  • Cryptocurrency software is decentralized and distributed, meaning it is hosted on many peoples’ computers across the world instead of just on one server by one company.
  • The algorithms generally are written to award coins to computers that add transactions to the blockchain. The process of adding transactions to the blockchain is known as mining.
  • The code of the cryptocurrency defines things like maximum supply, mining rewards, etc.
  • Thus, for most cryptocurrencies, the main way new coins are created is by people all over the world running hardware that adds transactions to the blockchain.
  • How do i create a bitcoin wallet


    The chain is the collection of blocks (that contain the transactions) linked to each other so that we can access them in a systematic manner.

    To get things started, let’s set up the constructors and properties we will be using with the Block class:

    class Block { constructor(previousHash, transaction, timestamp = Date.now()) { this.previousHash = previousHash; this.transaction = transaction; this.timestamp = timestamp; } }

    In a block, we will have previousHash (the hash of previous block on the chain), transaction (the object of class Transaction), and timestamp (the time the block was created).

    Now, let’s create a function to generate a hash of the block:

    getHash() { const json = JSON.stringify(this); const hash = crypto.createHash(“SHA256”); hash.update(json).end(); const hex = hash.digest(“hex”); return hex; }

    Firstly, we convert the object into JSON format.

    How do you create a cryptocurrency

    It might consider developing its cross-border payment system using the blockchain.

    In 2021, Malaysia collaborated with South Africa, Australia, and Singapore. This collaboration is to develop a proof-of-concept CBDC pilot called Project Dunbar.

    In Brazil companies like VISA are integrating crypto investments into traditional banking sectors. Panama is looking to draft a cryptocurrency law of its own.

    Amidst all this CUBA has passed regulations to legalize cryptocurrencies.

    The country’s central bank recognizes cryptocurrencies.
    Like bitcoin and Ethereum as legal investments.

    Reserve bank of India also recently said that it’s looking to create its digital rupee.

    HSBC and IBM announced the test of an advanced token and digital wallet settlement.

    How can i create a cryptocurrency

    Otherwise, cryptocurrency tokens are created by other mechanisms contained in a cryptocurrency’s software.

  • Lastly, the code for almost all cryptocurrencies is public, so anyone can check how coins are created.
  • FACT: Because the supply and inflation of a given cryptocurrency is defined by code, it is known upfront whether a coin is inflationary or deflationary. The only way to change that is to change the software. To change the software, the majority of computers running the software have to agree on an upgrade.
    In most cases, something like a change to the rate of supply would result in a “fork” (a new version of the software). Given all of this, it is unlikely the supply or rate of issuance of a coin like Bitcoin would ever be changed.

    How create a cryptocurrency

    Naruto), and then sent money from one wallet to other and finally logging the chain to see how it looks.

    For me, my chain looked like this (yours might be different because of different hashes):

    Chain { chain: [ Block { previousHash: ”, transaction: [Transaction], timestamp: 1634561976555 }, Block { previousHash: ‘c22300510c923a8ebf4d804f6edb4370731fcfd58f938d255852b4ea2744f20e’, transaction: [Transaction], timestamp: 1634561976623 }, Block { previousHash: ‘1799ab15685e086cdb539e1851a759c713b3f71205664286cd4024c9f74d2a69’, transaction: [Transaction], timestamp: 1634561976628 }, Block { previousHash: ‘1eb1f51c1b94a18f1c35e0cd81245ea6c69bac0100573cb76f3dac8026132597’, transaction: [Transaction], timestamp: 1634561976629 } ] }

    What’s next?

    This was just the basics of creating cryptocurrencies using JavaScript.

    How do i create my own cryptocurrency

    Creating a new cryptocurrency using open source blockchains is doable.

    Creating a cryptocurrency and trading it on exchanges gathers value over time.

    Facebook created a new cryptocurrency in association with the Libra foundation called LIBRA.

    The debate around central banks creating their digital currencies gained interest after Facebook.

    An increase in demand in the crypto market leads to the creation of new cryptocurrencies.

    EY’s “2022 Global Regulatory Outlook” highlighted the need for a policy change. This will help financial services firms overcome mainstreaming of digital assets and cryptocurrency.

    The firm recommended that banks should change their regulatory practices. These new practices should address the central bank’s digital currencies and private stablecoins.

    Malaysia’s central bank recently completed a sandbox approach for a CBDC.

    How to create a cryptocurrency coin

    Each block has a hash value that can be verified if it is legitimate and has not been injected by some hacker.

    Since the blocks are connected to each other, the existing blocks cannot be changed, because all the blocks are linked together.

    ​​

    ​​In the above diagram, A, B, and C are three blocks. These contain transaction data (amount of cryptocurrency sent, recipient wallet address, and other metadata). As we can see, each new block is linked to the previous block.
    This is done by storing the hash of the previous block in Prev​ and hash of next block in Next​.

    Transactions on the blockchain are kept on track using this method. To find any block, the other blocks are required. So, it’s not possible to delete one of the blocks or edit them because their hashes are verified, and maliciously altered blocks can easily be identified.

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