Bitcoin: Could You Create A Substitute?

Bitcoin: Could You Create A Substitute?
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Bitcoin may be the most popular crypto-currency out there, but there are others in existence. And believe it or not, you might even be able to make your own, according to Lifehacker. Of course repeating the success bitcoin appears to have stumbled into might be more difficult than you think.

Convincing others to use your bitcoin substitute

Before you go about creating your substitute for bitcoin, you have to ask yourself what sort of value people will find in your crypto-currency. What can you offer them that other payment systems don’t? And are those benefits something you can sell?

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As Lifehacker notes, sometimes you might even be able to invent benefits, like if you can convince a big star like Justin Bieber to sell all of his licensed products using only your invented BieberCoin. You could also offer other benefits like lower processing costs or faster processing times. You may also find a home for your new crypto-currency within certain niche communities.

Dodging certain costs

Next, you’ll have to get your own community started, which requires an infrastructure. Bitcoin miners make their money by mining the crypto-currency, but they also provide infrastructure for it. The key here is to offer something in return to tempt people into essentially building your infrastructure, like bitcoin did.

There are also other costs you may have to consider if starting a crypto-currency. If you have a supportive community, once again, you might be able to dodge some of these costs, but only if people are willing and able to provide their talent without expecting you to actually dole out real cash and pay them. Of course programming skills are going to be a big part of your costs because this is how crypto-currencies are created, so if you’re not a programmer, you could be facing some massive up-front costs in this department.

Keeping legality in mind

Legality is also an important issue, and those who are thinking of starting their own crypto-currency would do well to pay attention to the legal battle which has embroiled bitcoin. Regulators and governments are considering what to do with it and whether to make it illegal. You certainly don’t want to make your currency violate laws in some way.

Trademark infringement is also serious business, so make sure you’re not stepping on anyone else’s trademark when you brand your currency. For example, don’t create Bieber coin without getting Justin’s official permission. Learn from what happened to the guys who created the Coinye West crypto-currency.

Lifehacker also recommends that the code for your crypto-currency be open-source, just as bitcoin is. Also make sure other people check the code to check for security.

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