A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.
Bitcoin created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a blend of alternative coin. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control is related to the use of bitcoin's blockchain transaction database in the role of a distributed ledger.
The buzz around blockchain and cryptocurrency might be something that doesn’t let you sleep at night, annoys you, makes you excited or desperate to engage with the new technology.
The first cryptocurrency was Bitcoin introduced in 2008 as the open-source transparent digital currency not vulnerable to any manipulation during the exchange. Basically, the creation of cryptocurrencies means building a cash system with no central entity, based on the decentralized network.
Blockchain comprises all transaction records conducted within the network in the specific data blocks that use cryptographic validation. Since the ledgers aren’t stored in any centralized location, the system is based on a database of transactions sustained on different computers, which accounts for high security and transparence.
WHY ONE HAVE TO CREATE THEIR OWN CRYPTOCURRENCY?
- Avoiding the risk of fraud. The use of cryptocurrencies allows people to purchase any goods and services.
- The privilege of anonymity. With cryptocurrencies, it’s possible to sustain any transactions anonymously, without the risk that governmental institutions can track your financial activities.
- Staying ahead of competition.
- Attracting talents. Digital awareness is an important asset of both large businesses and startups.
PROCESS OF CREATING CRYPTOCURRENCY:
Even with the basic coding skills, it’s possible to understand how to make a cryptocurrency. Create a relevant concept and attract community. Focus on the long-term perspectives. It’s not the coding part which is so difficult. Conceptualize your cryptocurrency.
There is tips also available for creating cryptocurrency and there is three example of cryptocurrency which are given below.
LOSS,THEFT AND FRAUD:
GBL, a Chinese bitcoin trading platform, suddenly shut down on October 26, 2013. Subscribers, unable to log in, lost up to $5 million worth of bitcoin.
In February 2014, cryptocurrency made headlines due to the world's largest bitcoin exchange, Mt. Gox, declaring bankruptcy. The company stated that it had lost nearly $473 million of their customer's bitcoins likely due to theft. This was equivalent to approximately 750,000 bitcoins, or about 7% of all the bitcoins in existence. Due to this crisis, among other news, the price of a bitcoin fell from a high of about $1,160 in December to under $400 in February.
On November 21, 2017, an online company which backs bitcoin cryptocurrency with fiat currency claims they were hacked, losing $31 million in USTD from their primary wallet. The company has 'tagged' the stolen currency, hoping to 'lock' them in the hacker's wallet. Tether indicates that it is building a new core for its primary wallet in response to the attack in order to prevent the stolen coins from being used.
On December 6, 2017, more than $60 million worth of bitcoin was stolen after a cyber attack hit the cryptocurrency mining platform NiceHash. According to the CEO Marko Kobal and co-founder Sasa Coh, bitcoin worth $64 million USD was stolen, although users have pointed to a bitcoin wallet which holds 4,736.42 bitcoins, equivalent to $67 million.
Gareth Murphy, a senior central banking officer has stated "widespread use would also make it more difficult for statistical agencies to gather data on economic activity, which are used by governments to steer the economy". He cautioned that virtual currencies pose a new challenge to central banks' control over the important functions of monetary and exchange rate policy.