7 Steps To Create a Cool NaiveCoin Cryptocurrency

Naivecoin is an open source implementation of a cryptocurrency. It includes all the major components needed to build a cryptocurrency such as a miner and the blockchain. If you’ve been reading about BitCoin and other cryptocurrencies and still don’t quite understand how they work, you should check out the code in Naivecoin.

The Naivecoin tutorial has 7 parts to it, starting with a minimal blockchain, moving on to a Proof-of-Work implementation and creating transactions between wallets. The last part of the tutorial has code for creating a user interface for the Naivecoin wallet.

Sometimes to understand a concept we have to implement it ourselves. Or in this case, we can use someone else’s implementation as a live simulation that we can watch and read through the code.

Create Your Own Cryptocurrency and Blockchain

Naivecoin is written in Node.js which should make it easy for everyone to learn from. It is short and the author aims to keep it as small as possible. This makes the code straightforward to read through and to understand each component of making a new cryptocurrency and blockchain.

Implement the Blockchain and Proof-of-Work

There are two major components: the blockchain and the Proof of Work (PoW). The blockchain stores the blocks and the transactions. The Proof of Work determines how the blocks are turned into value, for instance with BitCoin they are mined through performing computationally intensive calculations. With NaiveCoin you can learn how to build these components and how transactions amongst many users, and how the cryptocurrency can be mined with a proof of work.

The blockchain part of the Naivecoin tutorial explains the structure of a block in the blockchain and what data it stores and it is connected to other blocks.

We had a blog post about Copay, a shared bitcoin wallet. It would be cool to see someone implement a shared wallet for NaiveCoin. Another idea is to add smart contracts to NaiveCoin.

Proof-of-Stake: an Alternative to Proof-of-Work

Another developer, Sandoche Adittane, has implemented an alternative to the Proof-of-Work in Naivecoin using Proof-of-Stake instead.

As explained in tutorial, Proof of Work relies on computational power for the consensus algorithm. So if you have many CPUs (or GPUs) you can crunch a lot of numbers and calculate the hashes needed to mine the next blocks. With Proof of Stake, computational power isn’t a factor in the consensus algorithm, instead it’s the amount of currency held within the system. It’s an interesting idea and easier to understand when trying to implement it using Naivecoin Proof-of-Stake.

If you have an idea for how a cryptocurrency could be better, you can use Naivecoin as a basic implementation and proof of concept.

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