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."
There's one born every minute. (Score:5, Insightful)
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!".
Re:Namecoin (Score:5, Insightful)
At least that's more visually appealing than the goddamn Slashdot beta site.
Yeah No. (Score:2, Insightful)
Bitcoin. The best pyramid scheme since I can't remember when.
Re:Version 1 cryptocurrencies... (Score:2, Insightful)
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.
I don't get it (Score:5, Insightful)
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.
Errors in Paper (Score:5, Insightful)
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:Is he really a "sucker"? (Score:4, Insightful)
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.
Re:Is he really a "sucker"? (Score:5, Insightful)
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:Is he really a "sucker"? (Score:4, Insightful)
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?