Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
×
Bitcoin Encryption The Almighty Buck

How To Create Your Own Cryptocurrency 203

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."
This discussion has been archived. No new comments can be posted.

How To Create Your Own Cryptocurrency

Comments Filter:
  • by Animats ( 122034 ) on Tuesday January 07, 2014 @05:42PM (#45892593) Homepage

    As I noted on Bitcontalk to someone who bought Bitcoins for over $1000 each, "Great! We need suckers like you to keep this thing going!".

    • by davidhoude ( 1868300 ) on Tuesday January 07, 2014 @05:42PM (#45892601)
      I'm no sucker. I only buy coins named after celebrities.
    • by Anonymous Coward

      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? And what if that all happens within the next year?

      That "sucker" you were referring to could very well be a very astute investor.

      Until sufficient time has passed, you won't know for sure the long-term value of that investment. While it could be a very poor one, it could also turn out to be a very, very lucrative one. Only time will tell, my friend. Only time will tell.

      • by PvtVoid ( 1252388 ) on Tuesday January 07, 2014 @06:18PM (#45892933)

        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. [arxiv.org]

        • Errors in Paper (Score:5, Insightful)

          by DanielRavenNest ( 107550 ) on Tuesday January 07, 2014 @06:50PM (#45893181)

          I found mutiple errors in the first paragraph of the paper. That does not engender trust in the quality of the authors work. The first paragraph of the paper states:

          > Every four years the number of bitcoins created is scheduled to be cut in half until 2040

          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.

          > Mining is done by volunteers who operate servers running bitcoin software.

          Three errors in one sentence. Most miners do it for income, not volunteering. They earn a share of the block reward by participating in mining pools. They don't use servers, they used to use graphics cards until that became too difficult, and now mostly use custom hardware (ASICs). Neither are servers in the client-server sense, they are nodes in a peer-to-peer network, because they have to receive new transactions and send completed blocks to the other nodes. Miners generally don't run "bitcoind", the default client, or other wallet software. They run custom mining software for the kind of mining hardware they use.

          • Re:Errors in Paper (Score:5, Informative)

            by subreality ( 157447 ) on Wednesday January 08, 2014 @12:23AM (#45895057)

            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.

        • by z0idberg ( 888892 ) on Tuesday January 07, 2014 @06:51PM (#45893187)

          Which part of that suggests that GPs $1000 "sucker" can't make a short-term profit and get out by selling at the right time?

          An investor who bought in at $500 and sold at $1000 isn't a sucker and it isn't necessarily dumb luck either. You don't have to believe in the underlying principles or long term prospects of a company/stock/currency/anything to be able to make a quick buck off it off the back of short term investor behavior or market conditions.

          • by tftp ( 111690 ) on Tuesday January 07, 2014 @07:45PM (#45893587) Homepage

            That is very true. A wise speculator can make money on any asset, as long as the asset's price is moving. It was tulip bulbs, and it was shares, and it was metals, and it was houses... and now it is just long numbers.

            It's just important to note that being money and being an object of speculation are two goals that are diametrically opposite. So far BTC is an excellent object of speculation - and the better it becomes at that, the less attractive it becomes as money. The BTC picked the speculation route, and as result it is now a bubble. "Buy now, the prices are guaranteed to grow into millions per coin, the prococol is designed for that!"

            • Re: (Score:2, Informative)

              by Anonymous Coward

              A "wise speculator" stays the hell away from "assets" which have no intrinsic value and whose valuation depends entirely upon the actions of fools. If you plan to gamble on the markets, there are plenty of opportunities which aren't as risky as cryptocurrencies. They're "assets" whose value could collapse to its natural value -- zero -- at any time, without any warning, for no particular reason.

              At least during the classic tulip runup, what was being bought and sold was an actual scarce resource -- beautif

              • by dk20 ( 914954 ) on Tuesday January 07, 2014 @09:33PM (#45894169)
                True in theory, but not in reality. How many "internet companies" are trading at high multiples? What is their "intrinsic value" and why are the multiple so high?

                Take a look at companies you think have "intrinsic value" and note their relative low PE's. Now take a few you think dont have intrinsic value and the corresponding high PE's. Why do people pay that PE premium?

                For example, here is the PE for facebook: 121.08

                And for reference:
                Google 32.71
                Apple 13.63


                How much advertising can you sell?

                Somewhat correct about Tulips, but it was more a "economic bubble" something like the internet bubble in the early 2000's or the more recent "housing bubble"
        • Bitcoin has many huge flaws as a currency, as the paper points out. I can see it finding a niche as a payment service for those distrustful of conventional finance. That's quite a lot of people right now.

          • by tftp ( 111690 ) on Tuesday January 07, 2014 @10:02PM (#45894325) Homepage

            I can see it finding a niche as a payment service for those distrustful of conventional finance. That's quite a lot of people right now.

            I understand that there are people (not too many, but some) that do not trust US banks, or Federal Reserve, or the US Government. However what in the world would make them trust Mt. Gox instead?

            • by zsmooth ( 12005 )
              You don't have to trust Mt. Gox to use Bitcoin.
              • by tftp ( 111690 ) on Wednesday January 08, 2014 @12:29AM (#45895089) Homepage

                You have to trust some exchange. Otherwise where are you going to get your BTC, and how are you going to spend it? Mining today is not for common people. On the spending side, there are a few businesses that take BTC - but they rarely sell what you need (usually it's services that cost very little to provide, like hosting.)

                Trusting the exchange means that you need to send your country's currency to a faraway country. The exchange there operates without any oversight, and it is only due to goodness of their heart that they send some BTC into your wallet. The same happens in the opposite direction: you send them your BTC, and in return, at some later time (soon or not so soon) they will send you the national currency - that you may have to explain to your country's tax authorities.

                The exchanges are not immune from more common financial difficulties - here is one story [wsj.com] as an example. Exchanges are not insured, and they can crash and burn at any time. Sending money to them always carries a high risk of never seeing the money again. This is far less of a concern with a bank, where you have a contract and where your money's path is traceable.

                Note that both conversions (to and from BTC) cost you money; and the BTC transfers themselves also cost money [bitcointalk.org]. BTC was always claiming that fees are optional and symbolic, but none of that appears to be true today, as mining turned into a for-profit business with hefty investments and running expenses. In the end, the service (BTC or bank) will cost you something because the work has to be done, somewhere and by someone, and the BTC not a network of close friends anymore. People are in it for money, and guess whose pockets that money is supposed to come from?

        • Bitcoin seems to be not a whole LOT more than a novelty* in the US but people in non-USA countries are using it for money and protection of wealth. That's what driving the dollar exchange rate up.

          And, at $1000 a bitcoin, or $50000 per coin, I imagine people won't be buying whole "coins" but fractional amounts.

          *aside from silk road equivalents.

      • by Luckyo ( 1726890 )

        "Long term value" usually means over several years. Not what happens in a year.

      • by Applehu Akbar ( 2968043 ) on Tuesday January 07, 2014 @07:22PM (#45893405)
        When Bitcoin goes over $2000 yes, you'll be able to buy any tulip bulb you want.
      • Is suckertude really determined by the eventual outcome, or by the quality of the evaluation of the action at the time it is taken?

        As perhaps the clearest extreme example, buying lottery tickets is an activity well known to have a negative expected value. However, if suckertude is determined by outcome, out of all the people who buy a ticket in a given lottery, an identical action, one or two will be massively non-suckers, a modest number will be slightly non-suckers, and the rest will be suckers. Does i
      • by dk20 ( 914954 )
        What happens when China bans it and the "price" tumbles like they did in early Dec?

        What happens when all the "Learn FX trading now" guys move over from real FX to "BitFX" and saturate the market with potential "million dollar traders"?

        Wont be long before its "played out" and everyone moves on to the next big thing.
      • by Dunbal ( 464142 ) *

        a very astute investor.

        Speculator. Investment is something else entirely. You have something at the end of the day when you are investing, there is simply no way to lose your capital. Risk is kept to a minimum. Speculation on the other hand is, well, roll the dice again let's see what happens... The difference is subtle - so subtle that most people don't get it. But it's the difference between buying a piece of land or a barrel of crude oil versus buying, well - Bitcoin... It doesn't matter if you made millions with bitcoin - yo

      • > What happens when Bitcoin goes over $X?

        The basic problem is that this runup in perceived value is due to the prospect of it becoming an accepted currency, but it can never achieve that so long as its value isn't stable. Who will exchange X bitcoins for Y stuff if they think it will buy 2Y tomorrow or next week?

    • Lets ignore the point of the website -- creating similar source codes from a template -- for a moment.

      The *business model of this website* is interesting. Could it be the future of revenue for developers? You set up your Software as a Service, and ask for payment in a quick and painless form (BitCoin, or what Mozilla tries to do with WebPayment). With the rise of electronic currencies that can handle small transactions without friction, is everything going to be online, and commercial?

      All these "convert you

    • by Dunbal ( 464142 ) *
      You're going to look like a fool when Bitcoins are worth $100,000 each. But then the guy who buys them for $100k is going to feel like a fool when they're back to $0.30.
    • Nothing wrong with paying $1000 per bitcoin if the intention is to spend them. Paying $1000 for a bitcoin as an investment is of course a dangerous idea.

  • These new coins are great, but IMHO, these are just version 1.x of the coins.

    What would be interesting would be a coin that would combine the obvious market value of eGold, the anonymity of a Chaumian currency, with the popularity of BitCoin. Someone does this, it has a better chance of becoming a currency of choice.

    Of course, this would mean that mining and stuff wouldn't be a part of the process, but it would mean that the currency has some real world backing.

    • Re: (Score:2, Insightful)

      by lgw ( 121541 )

      Mining is the same as "transaction authentication". If you have a better idea for incenting people to authenticate transactions without a central server, the world would benefit.

    • by mysidia ( 191772 )

      What would be interesting would be a coin that would combine the obvious market value of eGold, the anonymity of a Chaumian currency, with the popularity of BitCoin. Someone does this, it has a better chance of becoming a currency of choice.

      How about a Meta cryptocurrency? It would be similar to Bitcoin -- but instead of merely having the right SHA-256 hash as proof of work; the proof of work would also have to include a transfer of Bitcoin tokens, maybe some other tokens in different cryptocurren

  • Yeah No. (Score:2, Insightful)

    by Anonymous Coward

    Bitcoin. The best pyramid scheme since I can't remember when.

    • Unless you consider PayPal and Western Union to be pyramid schemes, then no, neither is the Bitcoin Network. All three are in the business of moving money from one place to another. The Bitcoin Network happens to use it's own internal accounting unit, the "bitcoin" unit, which is transferable once purchased. But if you buy some bitcoin units in the US with dollars, and send them to someone in Poland who exchanges them to Zloty, it looks just like PayPal or Western Union: money goes in one end, money come

      • by dj245 ( 732906 )
        Last I checked, $1 sent by any other money transfer service was still $1 once it got to the other side (ignoring fees, which are fixed and known in advance). With Bitcoin, that $1 might be worth $1.2 or $0.7 by the time it gets to the other side's bank account. That isn't a very smart way to transfer money around unless you have a strong need to hide your transaction from someone.
  • by IonOtter ( 629215 ) on Tuesday January 07, 2014 @05:56PM (#45892739) Homepage

    Once Kim Dotcom gets that whole mess worked out with the US DOJ, he can make his own cryptocurrency.

    And depending on how he ties it to his services, I bet people will use it and/or find it valuable.

    • by santiago ( 42242 )

      Sure you mean Kim Dotcoin, yes?

    • Considering that Mega has bombed so badly that Kim was recently forced to resign as Director, I don't think the demand for his services is large enough to warrant a new currency.

  • by chris200x9 ( 2591231 ) on Tuesday January 07, 2014 @05:58PM (#45892761)
    I'm in the process of making a coin! I named it HLC or HighlanderCoin, it's halves every 500000 and has an initial block value of 0.000001 HLC. Best part is, there can be only 1!
  • by gallondr00nk ( 868673 ) on Tuesday January 07, 2014 @06:01PM (#45892787)

    I imagine for most people in the future, the point of crypto currency is not to speculate or profit from mining, but to facilitate a sort of cash analogue online. Having a load of different currencies might introduce an element of stability which is lacking in Bitcoin.

    It might be interesting to see these new currencies made completely fiat. Mining seems to just waste energy, since the scarcity (unlike say, gold) doesn't actually stabilise the price, as Bitcoin has demonstated.

    I imagine the problem then is converting the myriad of cryptocurrencies back into "hard" money.

    • Re:It's a nice idea. (Score:5, Informative)

      by DanielRavenNest ( 107550 ) on Tuesday January 07, 2014 @07:18PM (#45893375)

      > 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.

    • You want price stability? Remove mining for new coins all together. Though you can keep transaction fee based mining I suppose.

      Create a trusted "mint" key that is allowed to create transactions with no inputs, or no outputs. Have this mint key in the possession of an institution with a strong reputation.

      The mint should be forced to buy and sell coins at fixed prices denominated in a specific currency, with say a 3% split on transactions and perhaps a minimum transaction size. eg they sell coins @$1.03 USD

    • In a perfect world, bitcoin is supposed to be sort of like any other currency, say like Euros and Dollars. So it shouldn't be something you invest in, but something that enables you to sell and buy goods, potentially in a way that's not possible through traditional currency methods.

      Mining isn't a waste since it keeps the whole system going. The problem with the extreme volatility of the bitcoin price is that the size of the bitcoin economy is still relatively small, and the number of bit coins that are regu

  • by Xeno-Root ( 2914175 ) on Tuesday January 07, 2014 @06:03PM (#45892805)
    To educate people into not using altcoins.
    • If the fact that pretty much every "legitimate business" that has been involved with bitcoin has either gotten royally screwed or has royally screwed its customers hasn't dissuaded them this surely won't.

      I wouldn't be surprised if the coin client linked in that article has some trojan.

  • by MiKM ( 752717 )
    The article is pretty lame. It doesn't describe how to create your own cryptocurrency. It just tells you how to pay some guy to do it for you.
  • The code is open source but getting the source "costs extra"?
    • Bitcoin and its imitators are open source. The web app that the article is about allows one to generate their own altcoin for 0.01 BTC, with the release of the source code for your custom altcoin costing extra. I'm not sure if the licensing of Bitcoin allows you to distribute a derivative without source, but even if it did no one would take it seriously. Even Dogecoin provides source.
  • Dickcoins in 3...2...1...
  • - Saves on printing costs
    - Makes direct deposit easier
    - Helps attract trendy brogrammers
    - Helps corporate tax avoidance without such plans as "Double Irish Dutch Sandwich"
    - The new hot topic in boardrooms

  • Instead of hashcash, it would use proof-of-work like "cat"aloging lolcat pics. The masses of homeless people would "mine" lolcat pics all day instead of panhandling ("I canz has a coin,man?").

    Seriously, though, hashcash needs to be replaced with something more useful. Prime coin seems to be on the right path, but I am sure this area is still way under tapped.
    • It has to be a function which can be verified in much less time than it can be computed. That limits the selection of potentially useful functions.

      • by Idou ( 572394 )
        Yes, I understand that. However, certainly there are more possible functions that meet this verifiability requirement than just meaningless hashing algorithms and Cunningham chain searching algorithms.

        Crypto-currency is a technology that taps into the limitless supply of human greed. Surely there is no more noble geek cause than hacking the most destructive force of man to do good.
  • by pesho ( 843750 )
    At the end all these currencies will join the Euro.
  • Now _THAT_ is how you make the big bucks.
  • Write "Joe owes me $1" on a piece of paper and use it instead of $1.

    Done.

    Nobody will accept it. Nobody knows who joe is. Nobody knows where the paper has been or why.

    Just like all the e-currencies. Just a little more anonymous and transparent.

  • I don't get it (Score:5, Insightful)

    by dave562 ( 969951 ) on Tuesday January 07, 2014 @06:38PM (#45893099) Journal

    Flame away, but I think the whole trend of digital currencies is stupid. It basically comes down to people tasked their computers with solving math problems. Okay, big deal. Whoopie for those people. Their math problems are not worth anything. The inverse of the old saying, "Nothing of value was lost." fits here. Nothing of value was created.

    People want to trade one fiat currency, for another? Okay. What's the point?

    Our economic challenge is one of resource scarcity. Coming up with schemes to trade compute time for fiat paper is not doing anyone any good.... With the exception of those few who are fortunate enough to convince some suckers to trade their paper for solutions to complex math problems.

    • you say that as if you think that green papers with pictures of dead people and masonic imagery on them are inherently worth anything. as for the math problems not be worth anything they secure and process the transactions so are of great value to currency.

    • Flame away, but [...] People want to trade one fiat currency, for another? Okay. What's the point?

      Our economic challenge is one of resource scarcity. Coming up with schemes to trade compute time for fiat paper is not doing anyone any good.

      Your post was neither inflammatory nor derisive. Ask, and it will be answered.

      Crypto currency has three major advantages over state-issued currency: reduced transaction fees, no counter-party risk, and lower barrier for use.

      1) Counter party risk [investopedia.com] in this case is where some agent involved in a transaction does something which is not in the interests of the participants.

      For example, consider the parties involved in making an eBay purchase: eBay can sell your purchasing habits to advertizers, PayPal could take [paypalsucks.com]

  • Diluted legitimacy (Score:4, Interesting)

    by Okian Warrior ( 537106 ) on Tuesday January 07, 2014 @06:40PM (#45893109) Homepage Journal

    Well, here's a new section for my "beating down democracy" book.

    Suppose you want to discredit crypto-currencies, or at least dilute their effect. What can you do?

    You can start a raft of new currencies with sketchy names and origins. Currencies based on celebrities, currencies based on businesses, sports (such as Nascar commemorative plates [ebay.com] - good as gold in many US locations), and even personal currencies!

    "We can't stop people from using BitCoin! What can we do?"

    "Let's generate alternatives - so many that people won't know which ones to use."

    "You mean like software standards?"

    "Yes - exactly like software standards."

    "Heh. They'll never see that coming..."

    • Well, here's a new section for my "beating down democracy" book.

      Suppose you want to discredit crypto-currencies, or at least dilute their effect. What can you do?

      You can start a raft of new currencies with sketchy names and origins. Currencies based on celebrities, currencies based on businesses, sports (such as Nascar commemorative plates [ebay.com] - good as gold in many US locations), and even personal currencies!

      "We can't stop people from using BitCoin! What can we do?"

      "Let's generate alternatives - so many that people won't know which ones to use."

      "You mean like software standards?"

      "Yes - exactly like software standards."

      "Heh. They'll never see that coming..."

      i think at this point they are to late and the network effect will stop most most of the truly pointless "new" cryptocurrencies which are really just new block chains, i think there is still room for a truly new cryptocurrency as long as it actually brings something new to the table better algorithm, new features, integration with other existing blockchains, stronger cryptography, better anonymity, new paradigm.

      I would like see for example a currency that uses more that just a double sha2 or just scrypt in

  • by nurb432 ( 527695 ) on Tuesday January 07, 2014 @07:12PM (#45893323) Homepage Journal

    It sounds like a good idea for some cases, like for custom in-game currencies, and for 'private groups' of people.

  • by manu0601 ( 2221348 ) on Tuesday January 07, 2014 @09:28PM (#45894149)

    Such clones do not address the point of money creation control. It is always a technical question, while it should be a political question, controlled by the citizen for the general interest. Why should money creation policy be more technical and shielded from citizen will than any other policy or law?

    One could answer that central banks of developed countries are independent, so that their money creation policy is also a technical question, and the article notes that. Indeed bitcoin and friends are as undemocratic as the Euro, which is not an achievement.

  • I mine Gridcoins. They're not currently traded on any exchanges but I imagine once they catch on they will have some value.
    The reason being, they are tied to BOINC. The Gridcoin wallet verifies that you're working on BOINC projects and trickles coins to you as a reward.
    I don't even need to run the dedicated mining tools to get some coins on the side. I just work on the research projects that BOINC is dedicated to and the coins add up.

    Is it worth anything right now? Nope. But it might be in the future. And i

    • by Kris_J ( 10111 ) *
      I love the idea of Gridcoin, but the implementation is shocking. For a start, way too much trust is placed in the client to identify BIONC and increase rewards. This will get hacked so you don't have to run BOINC. Also, it only cares about CPU usages. I have a 2000-series ATI card that's no good for hashing, but will accelerate SETI@home. The Gridcoin client doesn't consider I'm doing work if I'm using a GPU, so I'm encouraged to drop GPU accelerated work and use a less efficient CPU. Not to mention that mi
  • Preferably a small one that's already a tax shelter, and will back the currency with gold. Or a large one who wants to cause some shit. Can you imagine if China got behind something like that?

    You have no idea the crapstorm that would cause internationally. I hope someone does it..

    The acid test for a currency is can you buy an ounce of coke with it. If you can, it's currency. If you can't, it's not..

You will lose an important tape file.

Working...