Can Anyone Create a New Cryptocurrency?
Exchanging an agreed-upon token in order to validate a physical or virtual transaction, is a 3,000-year-old process. Before the introduction of currency, if you had more sheep than you needed, and your neighbor was cattle-rich, the two of you could agree on some mutually acceptable sheep-to-cattle trade ratio that made you both happy.
As you can imagine, this bartering system meant there were wild inconsistencies in perceived value. In an attempt to solve this problem, and create a revenue stream for his kingdom, King Alyattes created the first currency for the citizens of Lydia around 600 BC. The introduction of currency in what is now the Western Turkish province of Manisa reminds us that there are not too many new ideas. Alyattes created a currency "out of the blue," and anyone can do the same with cryptocurrencies these days.
Taking Financial Regulation Away from a Centralized Authority
The savings and loans crisis in the 1980s and 1990s in the United States saw the failure of more than one-third of all the federally recognized savings and loans associations in the United States. The mortgage crisis of 2008 in the US caused global monetary damage. In both cases, the people tasked with regulating financial transactions by the government manipulated the system for personal gain, and millions of individuals and organizations in the United States and around the world paid an unfortunate price.
This is the inherent problem which can arise when a single regulating body has all the issuing, managing and verifying powers in a particular monetary system.
One way to stop this from happening is to create your own cryptocurrency. Instead of a centralized government bank or some other group handling transactions and updating ledgers, this takes place via an unbreakable blockchain verification process. Every individual who participates in your cryptocurrency marketplace shares a public ledger which is constantly updated and verified. Through this process, goods and services can be traded safely, and you can even trade cryptocurrencies themselves.
The process of creating and dispersing a new cryptocurrency is often called an initial coin offering, or ICO.
What technology do you need to start your own cryptocurrency?
Today, the average smartphone has more than 100 times the computing power of all the computers the United States government used to put a man on the moon. This means, because of the prevalence of powerful computing technology and the internet, you can create a cryptocurrency literally in just a few minutes. While some enjoy developing cryptocurrencies for clubs and membership groups, it is more common to use ICOs to raise capital for launching a new product, business or expanding an existing business.
You first need a community which agrees to use your virtual currency to perform a function, finance a transaction or perform some other type of service. You also need to code your coin or token. The Bitcoin open source software is often used by cryptocurrency creators, since it is freely and legally accessible, and requires just a bit of coding experience to get your new cryptocurrency up and running. An accomplished code writer can have your new virtual money up and running and available for use in your community in less than an hour.
Therefore anyone that has the backing of a community and a basic understanding of coding and online technology has the potential to create their own currency.
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