You can create new coins or cryptocurrencies without the interference or approval of any central bank, governing bodies or other financial institutions. This process is called minting. It is mainly a decentralised method, and you can do it in various ways.
To know more on this matter, read on….
Minting methods
There are two ways you can mint coins or tokens on a blockchain. They are:
Proof-of-Work
In this method, you can mint crypto coins through mining. You need high-powered ASIC computers that can solve complex mathematical problems. The blocks on a network need a unique hash to get mined, and these computers search trillions of such hashes to find the correct one. When you successfully mine a block, you get cryptocurrency as block rewards.
Proof-of-Stake
As the name suggests, this form of minting is done through staking. In this method, if you want to validate transactions, you have to stake a certain amount of cryptocurrency. The blockchain then chooses a stakeholder at random to validate a transaction. The more coins you have at stake, the more chance you have to get selected.
Coin minting
You can mint both coins and tokens on a blockchain. Ethereum, Bitcoin and Dogecoin are blockchain platforms where you can easily mint coins. You can transact using the coins you mine and get cash from other network users.
Minting tokens is much easier compared to coin minting. You do not need extensive coding knowledge, and it’s much easier to attract customers for a token on a blockchain than for a crypto coin.
To mine crypto coins, you can use the following steps:
- Make a framework for your crypto asset
In this step, you must state the options and roles of your crypto token.
2. State the token parameters
You must outline parameters such as your token’s total supply, preliminary value and distribution method.
3. Choose a blockchain platform
Select a blockchain platform that will suit you the best. Ethereum and Binance Smart Chain (BSC) can be viable options.
4. Select a consensus protocol
Choose whether you want a Proof-of-Stake or Proof-of-Work consensus mechanism for your cryptocurrency.
5. Design the nodes and the inner structure
Design your nodes based on how to make the blockchain function. You can set the design as permission-based, public or private.
The inner structure of your blockchain contains the core ideas that define your network. It also sets the format that the platform will use.
- Make a user-friendly interface
In this step, you need to make a user interface that people can easily navigate.
2. Set a minting mechanism
This step sets the method by which users can mint your token. It depends a lot on your token parameters.
NFT minting
In the current crypto market scenario, minting NFTs can prove quite profitable. If you are a digital artist seeking recognition, this can be a great way to do it. You can mint an NFT in the following way:
- Open a crypto wallet account and fund it with Ethereum
- Create an account on an NFT marketplace
- Connect your wallet to that account
- Upload your digital file and convert it to an NFT
- Post your NFT listing and share it on your social media
Minting coins, tokens or NFTs is a good way to earn passive income. Many investors like to invest in newly minted tokens if they find them of value. However, before starting, do conduct research on the latest market trends.
