Slashdot Mirror
How To Create Your Own Cryptocurrency
mspohr writes "Since the code for Bitcoin is open source, we have seen the creation of various Bitcoin clones and enhancements (Litecoin, Dogecoin or Coinye West, anyone?... There are about 70 listed on this site.) This article explains the process of making your own. Thanks to Matt Corallo, a veteran Bitcoin developer, you can easily create your own at coingen.io. He has automated the process of modifying the source code to create custom currencies. Just enter in the name for your new currency, a logo image and set a few parameters (or accept the defaults), and you can have your own cryptocurrency. Source code and some customizations cost a bit extra. Once you have your own 'coin,' you just need to convince people that it is worth something."
What happens when Bitcoin goes over $2000? Or what happens when it goes over $50,000? Or what happens when it goes over $200,000? [...] Only time will tell, my friend. Only time will tell.
Good luck with that.
Might I recommend this one instead: http://www.devtome.com/doku.php?id=scrypt_altcoin_cloning_guide Written by yours truly back in May. Source is no longer on line for the examples (foocoin) but there's so many clones out there, one can use any of them.
I know what you're thinking. Did I forward 65,535 packets or 65,536 packets?
> Mining seems to just waste energy,
No, mining is "proof-of-work" to enable reaching consensus on the order of transactions. This is necessary to prevent spending a balance multiple times. Only the first spending event counts. It is done by searching for hard to find hashes for a block of transactions + the hash of the previous block + a random number you insert until you meet the hard-to-meet condition (a low hash value). Using the hash of the previous block as part of the data for the current block puts the blocks in sequence, so you can know the order of transaction events. Attempting to change any block contents, such as altering transaction values or adding another transaction will change the hash, so it no longer matches the value stored in the next block. If you attempt to find a matching hash for your altered block, now the second block will no longer match the value in the third block. You end up having to find hashes for every block after the altered one up to the last one.
By making finding hashes so hard that the entire mining network can only succeed every ten minutes, you force everyone to collaborate on the search, leaving no computing power to generate an alternate history of transactions. The longest chain of blocks had the most work put into it, and thus represents the consensus of events.
If you can figure out another way to ensure digital transaction data isn't altered, great, you can become famous. Nakamoto's big invention is chaining hashes + requiring work to find the hashes, so that altering the data would require even more work. As long as a majority of the network is honest, a hacker can never catch up.
The correct date is approximately 2140 AD. The reward per block started at 50 BTC and is cut in half every 210,000 blocks, which nominally takes about 4 years. After ~130 years you have done 33 halvings, so the reward is 50 / (2^33) = 0.58 Satoshi, where 100 million Satoshi = 1 bitcoin. Since the smallest unit in the bitcoin transaction system is 1 Satoshi, the reward becomes too small to measure, and thus mining for new coins stops.
This is closer but still incorrect. All accounting in Bitcoin is performed with integer arithmetic. The reward per block started at 5,000,000,000 satoshis and is right shifted by one bit every 210,000 blocks. The reward does not become too small to measure - it becomes precisely zero.