Altcoin projects can be started very quickly from a coding point of view by simply forking the bitcoin or another coin’s source code, but this probably is not enough.
When a new coin project is started, several things need to be considered to ensure a successful launch and the coin’s longevity.
Usually, the code base is written in C++ as was the case with bitcoin, but almost any language can be used to develop coin projects, for example, Golang or Rust.
From a technical point of view, in the case of forking the code of another coin, for example, bitcoin, there are various parameters that can be changed to effectively create a new coin.
These parameters are required to be tweaked or introduced in order to create a new coin.
These parameters can include but are not limited to the following:
- Consensus algorithms
- Hash algorithms
- Difficulty adjustment algorithms
- Inter-block time
- Block rewards
- Reward halving rate
- Block size and transaction size
- Interest rate
- Coinage
- Total supply of coins
Namecoin
Namecoin is the first fork of the Bitcoin source code.
The key idea behind Namecoin is not to produce an altcoin but instead to provide improved decentralization, censorship resistance, privacy, security, and faster-decentralized naming.
It is based on the same technology introduced with bitcoin, but with its own blockchain and wallet software.
In summary, Namecoin provides the following three services:
- Secure storage and transfer of names (keys)
- Attachment of some value to the names by attaching up to 520 bytes of data
- Production of a digital currency (Namecoin)
Namecoin also for the first time introduced merged mining, which allows a miner to mine on more than one chain simultaneously.
Litecoin
Litecoin is a fork of the bitcoin source code released in 2011.
It uses Scrypt as PoW, originally introduced in the Tenebrix coin.
Litecoin allows for faster transactions as compared to bitcoin due to its faster block generation time of 2.5 minutes.
Also, difficulty readjustment is achieved every 3.5 days roughly due to faster block generation time. The total coin supply is 84 million.
Scrypt is a sequentially memory hard function that is the first alternative to the SHA-256-based PoW algorithm.
It was originally proposed as a Password-Based Key Derivation Function (PBKDF).
The Scrypt algorithm requires a large array of pseudorandom bits to be held in memory and a key is derived from this in a pseudorandom fashion.
The algorithm is based on a phenomenon called Time-Memory Trade-Off (TMTO).
Primecoin
Primecoin is the first digital currency on the market that introduced a useful PoW, as opposed to Bitcoin’s SHA256-based PoW. Primecoin uses searching prime numbers as a PoW.
The difficulty is dynamically adjusted via a continuous difficulty evaluation scheme in Primecoin blockchain.
The efficient verification of PoW based on prime numbers is also of high importance, because if verification is slow, then PoW is not suitable.
Therefore, prime chains are selected as a PoW because finding prime chains gets difficult as the chain increases in length whereas verification remains quick enough to warrant being used as an efficient PoW algorithm.
Zcash
Zcash was launched on October 28, 2016.
This is the first currency that uses a specific type of ZKPs known as Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge (ZK-SNARKs) to provide complete privacy to the user.
Zcash developers have introduced the concept of a Decentralized Anonymous Payment scheme (DAP scheme) that is used in the Zcash network to enable direct and private payments.
The transactions reveal no information about the origin, destination, and amount of the payments.
There are two types of addresses available in Zcash, Z address and T address.
Z addresses are based on ZKPs and provide privacy protection whereas T addresses are similar to those of bitcoin.
Zcash uses an efficient PoW scheme named asymmetric PoW (Equihash), which is based on the Generalized Birthday Problem.
It allows very efficient verification. It is a memory-hard and ASIC-resistant function.
Suryateja Pericherla, at present is a Research Scholar (full-time Ph.D.) in the Dept. of Computer Science & Systems Engineering at Andhra University, Visakhapatnam. Previously worked as an Associate Professor in the Dept. of CSE at Vishnu Institute of Technology, India.
He has 11+ years of teaching experience and is an individual researcher whose research interests are Cloud Computing, Internet of Things, Computer Security, Network Security and Blockchain.
He is a member of professional societies like IEEE, ACM, CSI and ISCA. He published several research papers which are indexed by SCIE, WoS, Scopus, Springer and others.
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