What is crypto currency (virtual currency)? Explaining how to build a blockchain and its level of difficulty

Cryptocurrency (virtual currency) is a currency that is traded as electronic data on the Internet. Cryptocurrency uses a technology called blockchain, and the market size is expected to continue expanding in the future. In this article, we will provide an easy-to-understand explanation of how cryptocurrencies and blockchains work, how to build them, etc.

What is cryptocurrency (virtual currency)?

Currencies exchanged over the Internet, such as Bitcoin and Ethereum, are called cryptocurrencies (virtual currencies). It is mainly used for investments, international remittances, and in-game transactions.

Legal currencies such as the Japanese yen and the dollar have their value guaranteed by the country, and physical currencies such as banknotes and coins exist. On the other hand, there are differences in the value of cryptocurrencies depending on the country, such as the value not being guaranteed and transactions using electronic data.

Advantages of using cryptocurrency

Cryptocurrency has advantages that legal currency does not have and is preferred and used mainly by investors. We will explain the benefits of using crypto assets from three points.

Trading is possible 24 hours a day, 365 days a year

Cryptocurrency can be traded 24 hours a day, 365 days a year, so you can invest in a way that suits your lifestyle.

Trading hours for stock investments are determined by the stock exchange, and in the case of the Tokyo Stock Exchange, trading can only be done between 9:00-11:30 and 12:30-15:00 on weekdays. Additionally, FX can only be traded on weekdays when the exchange market is active.

Cryptocurrencies, on the other hand, can be traded at any time without worrying about stock exchange or foreign exchange market times. Since the value of cryptocurrencies fluctuates regardless of weekdays or weekends, it is possible to make profits at any time. Even if you work during the day on weekdays, you can use other time to focus on trading.

Easily send and pay money overseas

Cryptocurrency is encrypted electronic data, which allows for speedy overseas remittances and payments.

When sending money overseas using traditional methods, it is common to send money through an existing financial institution. However, it may take 2 business days to 1 week for the recipient to receive the money. You also have to be concerned about high fees and financial institution business hours.

With cryptocurrencies, you can send money instantly with no waiting time, and there are small or no fees. You can use it when purchasing products from overseas brands and importing them personally, or when you want to send money to your family overseas.

Remittances and payments can be made without going through a financial institution

When users trade cryptocurrencies with each other, they do so through a company called an exchange. You can also purchase cryptocurrencies held by merchants from the sales office. Unlike legal currency, there is no need to use it through a financial institution, so you can send money and make payments without worrying about business hours.

Disadvantages of using cryptocurrency

When using cryptocurrencies, it is essential to understand the disadvantages in advance. Here are three disadvantages of cryptocurrency.

Transactions and payments cannot be made without using the Internet.

Cryptocurrencies are exchanged over a network, so they cannot be traded offline. If your equipment malfunctions or malfunctions, or if you go to a place with poor reception, you may not be able to conduct smooth transactions.

Most stock investment and FX transactions are done online, but some places still accept orders over the phone.

On the other hand, cryptocurrencies do not accept telephone calls and rely on the internet. Many people who are seriously investing in cryptocurrencies are particular about their communication environment and computers.

Tax rates may be higher

Profits from cryptocurrencies are classified as miscellaneous income and are subject to income tax using a method called progressive taxation. Progressive taxation is a system in which the tax rate is determined according to the amount of income, and the tax rate can be as high as 45%.

Keep in mind that stock investments are taxed at around 20%, so even if you earn the same amount of money, you may end up with less money invested in cryptocurrencies.

There is a risk of hacking due to service vulnerabilities.

Since cryptocurrencies are used over the internet, there is an inherent risk of hacking. In the past, cryptocurrency exchanges have been hacked and huge amounts of money have been leaked. In addition to hacking into exchanges, there is also the possibility that wallets that you manage may be targeted.

If you encounter such trouble with legal currency, you may be able to get compensation or other measures from your financial institution. However, since crypto assets are a new currency, you cannot expect the same compensation even if trouble occurs.

When trading with cryptocurrencies, it is important to choose a highly secure exchange. You must also take thorough measures on your own, such as installing security software and setting up two-step authentication.

How to make cryptocurrency (virtual currency)

There are two main ways to create cryptocurrencies: “build a blockchain and create crypto assets” or “create tokens.” I will explain each method.

make a token

Substitute currencies that can be used in the same way as Japanese yen, such as gift certificates and credit card points, are called tokens.

If you use the existing cryptocurrency mechanism as is, you can issue new tokens by setting the name, fees, initial issuance amount, etc. No specialized knowledge of cryptocurrencies or programming is required, and anyone can try it out relatively easily.

build a blockchain

Another way to create cryptocurrency is to build a blockchain program from scratch. Creating crypto assets using this method requires not only programming knowledge but also a huge amount of time. It is not as easy as using a token, and it would be difficult for an uninformed individual to do it.

The meaning and mechanism of blockchain will be explained in detail in the next section.

What is blockchain?

Blockchain refers to a collection of transaction data that cannot be tampered with. The history of multiple transactions is combined into one block, and the data is stored in a way that the blocks are connected like a chain.

Blockchain is also called “distributed ledger technology” because it is stored on the computers of all users of the service. A ledger is data, and it means that data is not aggregated in one specific place, but is distributed and stored on multiple computers. Due to these characteristics, blockchain is known to be resistant to system failures and can achieve high security at a low cost.

Blockchain was created as a technology for Bitcoin, a type of cryptocurrency, and has been used in the financial industry. However, due to its benefits, blockchain is expected to be used in a variety of industries in the future.

How blockchain is built

As mentioned above, building a blockchain requires programming, which requires a lot of effort.

However, instead of programming from scratch, there is also a way to create a program by copying and modifying an existing cryptocurrency program. Many cryptocurrencies such as Bitcoin and Ethereum publish their programs in a way called “open source” that anyone can view. Since many of these programs can be modified freely, many of the crypto assets that exist today use this method.

For example, Monacoin, a cryptocurrency created in Japan, uses a modified Bitcoin program. The parts that have been modified include the mining algorithm for generating new blocks in the blockchain.

Difficulty of developing blockchain

As we have explained so far, blockchain development is highly difficult and not something that anyone can do. In addition to programming knowledge such as development languages, knowledge of cryptocurrencies such as hash functions, public key encryption methods, and electronic signatures is also required.

For this reason, it can be said that it is desirable to outsource blockchain development to an excellent system company.

Blockchain is a technology that is often used in new fields such as cryptocurrencies and the Metaverse, so people tend to think that outsourcing it will result in a very complex and large project. However, some system companies can quickly develop high-quality blockchains.

Services provided by Hybrid Technologies

At Hybrid Technologies, we provide comprehensive services from business design, UIUX design, design, implementation, testing, release, operation, and maintenance. With over 500 experienced engineers, we can develop systems quickly and with high quality. We support various development methods such as agile development, water wall development, and hybrid development, and you can choose from two contract types: laboratory-type contracts and contract-type contracts. You can flexibly specify the development method and contract form depending on the customer’s situation and development content, but due to the compatibility of the characteristics of each development method and contract form, a lab-type contract is used for agile development, whereas it is used for waterwall development. For hybrid development, the majority of clients choose contract-based contracts.

Why choose Hybrid Technologies?

We listen to the voices of client companies and end users and design businesses with UIUX in mind. Deciding on a theme, analyzing it, creating a hypothesis, creating a business design, prototyping, testing, receiving feedback, and starting again with analysis. More than 500 engineers who are familiar with Agile Scrum development work through this series of processes at high speed to achieve better results in the fastest possible time. Hybrid Technologies has the structure and members to turn the voices of the market into reality.

Success stories of system development

Introducing success stories in system development.

Monitoring service (otta Co., Ltd.)

Service contents

A service that communicates location information history to parents through a free smartphone app or email.

Service issues/services we aim for

Challenges
Due to changes in the social structure, such as the increase in dual-income households and the number of elderly people, the need to watch over children and the elderly is rapidly increasing. On the other hand, the number of guardians is decreasing due to the aging of the people watching over them and changes in local communities, and to close this supply-demand gap, it is necessary to significantly improve the productivity of the monitoring system.

As a pioneer company in monitoring services
that utilize IoT, we aim to contribute to dramatic improvements in the productivity of monitoring activities and to create a fee structure that can be used by many people, something that has been difficult with conventional services.

Client issues/requests

・Lack of resources for additional development system
・Want to build a team by combining with an existing vendor’s development team
・Want to flexibly adjust resources according to the business situation

Reasons for choosing our company

Because it is a capital project we would like to ask for development depending on the investment from HT.

Our proposal details

Development of a monitoring management system for ToB, proposed through industry lab-type (stock) development + maintenance. We
want to create a management screen for the school bus management system and expand the service, keeping in mind future infrastructure changes. Future
development While considering building a system, he wanted to build a small system first and
use it as a foothold in the future. He wanted to be able to respond flexibly by utilizing resources, and although he had been focusing on Java, he wanted to proceed with development based on a more modern language. In response to the request, it was an area of ​​expertise.

Learning history data visualization system (The Open University of Japan)

Service contents

Development of learning history data visualization system

Service issues/services we aim for

A large amount of learning history data is accumulated in the database of the assignment online class system, and this data is organized so that it can be used by the person in charge at the university, and it can be used as hints for student guidance or as information to encourage students to take the course. There was an intention to use it as a source.

The service we are aiming for
– It should be a “tool” for on-campus personnel rather than a “service” to be disclosed outside the university
– It should be a tool that can be operated on the command line
– It should be possible to implement additional functions

Client issues/requests

・We do not have an in-house development system
・We want to achieve stable operation while keeping costs to a minimum

Reasons for choosing our company

The proposal fully met the specifications and the bid was submitted at the lowest price compared to other companies.

Our proposal details

Development of learning history database and BI tools
When utilizing the learning history data accumulated in the database of the online class system, we proceeded with the development by storing the data in MongoDB to avoid conflicts with the processing of the actual DB. Ta. Furthermore, when storing data in MongoDB, we adopted a data format that is compliant with the general-purpose Experience API, taking into consideration collaboration with other data.
Regarding the handling of personal information, to prevent the leakage of personal information of students, including development staff, we have implemented anonymization of student identifiers.

DocIT (Dokit Medical Service Co., Ltd.)

Service contents

A matching platform that connects medical workers looking for jobs and hospitals looking for workers.

Service issues/services we aim for

Problem
Solving the problem of hospitals struggling to find people in spot locations due to high referral fees.

A service
that allows doctors to diversify their work styles by matching doctors who want to make effective use of their free time on holidays or long business trips with hospitals that temporarily need manpower due to long holidays, etc.

Client issues/requests

・We have a service concept, but we need a development partner to make it a reality.
・We need development support from the upstream process.

Reasons for choosing our company

They chose us because they felt a sense of security as a partner who would accompany them and think along with them during development, from service design to main development.

Our proposal details

Proposals through laboratory-type (stock) development
1. Functional proposals, system design, and development considering the nature of medical recruitment

Since this service handles medical job openings where failure is not an option, it is important to be able to confirm that the doctor/hospital is reliable before job matching. Therefore, we proposed and realized the accumulation of highly reliable review information by implementing a mutual review function between doctors and hospitals that have matched job openings. In addition, by implementing a function that allows you to chat directly with hospital personnel before job matching, it is possible to confirm qualitative information that cannot be obtained from reviews. By incorporating the Agile Scrum method of development, we conducted weekly system development progress reports in a demonstration format while showing actual working system screens.

2. Proceed through the process of repeating regular sprints and improving quality together with customers

By seeing the system in action every week, we were able to feel reassured about the development progress and discover new improvements that the customer was unaware of, which we corrected and demonstrated again. By implementing this series of steps, we were able to provide what our customers wanted with high quality.

3. Share a concrete system image through visual output using design

For customers who are taking on the challenge of web service development for the first time, we also provide design support to give concrete form to the system image to realize the business the customer envisions. Due to the characteristics of a job information service, various information elements are mixed, so by organizing and proposing designs visibly, receiving feedback from customers, and repeating re-proposals, we can create a website that is more optimal for users. We designed, proposed, and realized the service.

THINK, Reviewers (Spice Box Co., Ltd.)

Service contents

A service that uses a unique “social listening” method to build lively communication between companies and consumers.

Service issues/services we aim for

Challenge
In many cases, the number of followers and engagement are considered important evaluation indicators for influencers, but when it comes to product sales measures, the number of saves is important. No platform matched influencers and companies based on the number of saves, so we wanted to develop a new service with a sense of speed.

Aimed service
/service name “THINK”: Reduce infrastructure costs while maintaining stable and continuous operation of the existing system for Twitter research.
・Service name “Reviewers”: Launching a new influencer matching platform that emphasizes the number of saved posts as an indicator of influencer marketing.

Client issues/requests

・It is difficult to increase the number of staff to handle RubyonRails each time development occurs.
・There are no strong members around the infrastructure.
・We want to achieve stable operation while keeping the cost to a minimum
. ・When additional development occurs, I want a system that allows me to work while maintaining my knowledge.

Reasons for choosing our company

・The flexibility of development resources and the wide range of support including infrastructure matched the needs of the client.
・The ability to keep costs low even during regular operations.

Our proposal details

By assigning direction personnel with knowledge of proposed infrastructure through contracted development (flow)
, we can build a system that can quickly respond to infrastructure-related adjustments and business responses. We
can handle a wide range of infrastructure/maintenance/development. We also proposed an offshore system that minimizes costs.
We created a manual so that the direction personnel had infrastructure knowledge and could perform routine work on the Vietnamese side, and proposed a system that would allow us to utilize a wide range of knowledge while minimizing costs. When new development occurs, we have created a system that allows us to quickly implement development by adding developers as appropriate while leveraging the knowledge of existing teams.

summary

Blockchain, which is used for crypto assets and cryptocurrencies, is a technology that is attracting attention in many industries, and the market size is expected to continue expanding in the future.

Development requires specialized knowledge, but by outsourcing to a systems company, you can develop without relying on in-house resources. When developing, please consider requesting hybrid technology.