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How Is Crypto Created? Let's Find Out!

By Gongo | Blockchain Benefits | 15 Apr 2021



Everyone by now has heard of cryptocurrency, or "crypto" for short.  A good amount of people are kind of getting the gist of what crypto is and how it is different from fiat currencies.  But a massive amount of people do not understand how is it made.  Where does it come from?  If you've read my other blog here about understanding the trading charts, you know there is a max supply of coins.  So how do we create the coins to get there?  This is a brief overview of the most popular way cryptos are created.  

I am not sponsored by Binance, YouTube, or VoskCoin. 
This is not financial advice.  I am not a financial advisor.
Please do your own research before making any decisions before investing. 
This article is meant for educational purposes only

Although it may seem like it to the crypto newcomer, cryptos are not made out of thin air believe it or not!  It's actually created utilizing a series of complex codes and equations.  You ever hear of crypto mining?  Keep your pickaxe away, we don't need that for this type of mining!  Crypto mining is performed when a transaction is confirmed on a blockchain using those complex codes and equations.  You can learn more about blockchains here!  When a transaction is complete, all information pertaining to it is stored in the blockchain, verified by a node (or nodes), and recorded.  A cryptographic code is created, further securing the network onto the next block for transactions to occur.  This process repeats itself constantly and coins are rewarded to those nodes that complete and verify the transactions.  




Let's talk about code.  Max supply and inflation of a crypto is defined by code.  Coins can either be inflationary or deflationary, and this is determined by the code that the software is operating with.  Once the code is set, it's difficult to change it, as this would mean that there would have to be a vote to perform any alterations of the software (which is pretty awesome in my opinion).  If you get the chance, check out a crypto mining plant.  This video here on YouTube is also a nice watch if you want to get some news coverage on what it takes to mine crypto.  


Crypto software can also contain different codes to reward stakeholders with tokens.  This means that if you hold a crypto that has this software coding built into it, you can be rewarded with the token.  A token is also a fungible asset on the crypto's blockchain that can be traded.  It's kind of like earning interest with your bank's savings account, but better, because it's decentralized!  Coins or tokens issued will always be the ones defined in the code, which is your crypto.  


I hope this gives you a better understanding of where crypto comes from and how it is made available!  The amount of computing needed to perform crypto mining is way beyond my comprehension... so I'll just stick to bring the guy talking about it on Publish0x!


Thanks so much for reading!  Please feel free to follow my page for daily blog posts about crypto news, updates, and research!  Have a wonderful day! 



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Blockchain Benefits

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