The only thing you need is an email address. That’s all. There is very little security, only the bare essentials. Other people can see how many coins you have if they know your email address.

You can send or request coins using the email address of the person you want to trade with. You can even send coins to people who do not yet have an account. Every transaction results in a confirmation email being sent to you, which you must approve before the transfer is completed. This helps ensure that nobody can spend coins that do not belong to them.

My first attempt of adding value
I have decided to give my crypto a value based on time. One crypto coin represents one minute. Fifteen coins equal fifteen minutes. If someone does something for me that takes five minutes, I give them five coins.

A cup of coffee, fully prepared and brought to the table: 5 minutes. A massage: 10 minutes. Cleaning a room: 20 minutes?

In our family these minutes can then be spent on activities that I would normally limit, such as using a tablet, a phone, or the PlayStation.

How much does it cost?
Crypto represents value, just as we discussed before. That value is based on trust, but part of it is also represented by costs. If hundreds of computers are used to store and verify transactions, every transaction comes with a cost. There are server costs, costs associated with keeping the ecosystem secure and up to date, and costs related to government regulations and compliance requirements.

In my case, the costs are much lower. I already had the basic infrastructure in place, and all transactions are stored on a single server. My trust in the currency is high, but for the rest of the world that trust still has to be earned, so for now I will realistically value it at zero.

The result is a coin that is free to obtain and free to exchange. Even better, you can receive 10 free coins every 24 hours!

What is it worth?
Value is complicated. It is usually based on how scarce something is and how useful it is to you. Some cryptocurrencies are expensive because they have gradually gained enough trust for people to consider them valuable. Every day, new cryptocurrencies appear from sources that people have never heard of, and these often lose trust (and therefore value) very quickly.

What remains is how you personally feel about the cryptocurrency. Is it useful in some way, and can you make use of it? For me, there is a cost involved. I pay for the servers, and I invest time in software development. Even so, I feel that I can find practical uses for this cryptocurrency.

After learning a little bit about cryptocurrencies and blockchains, I decided to create my own experimental coin: L365.

Unlike Bitcoin, L365 does not use a blockchain. For now it simply uses a database on my website to keep track of balances and transactions.

Users can receive 10 coins for free each day, as long as the supply lasts. Users can send coins to each other, collect them, and spend them on future features and experiments.

Like any currency, the value of L365 depends on whether people find it useful and are willing to use it. Because L365 is stored in a database that I manage, trust also plays an important role. Users must trust that I maintain the system fairly, keep accurate records, and do not create or remove coins without being transparent about it.

Is L365 a real cryptocurrency? Not quite. Is it a way to explore many of the same ideas behind money, trust, ownership, and value? Absolutely.

Its complicated. If you dont have a bank that manages all the money, you really need to have something transparent. Something everyone can understand. A list of all the coins there are, and how they have moved around from the beginning. A list stored on lots and lots of different systems. This is what some person called the blockchain. A blockchain is essentially a shared ledger. Thousands of computers can keep a copy of the same transaction history. Whenever coins move from one person to another, the network updates the ledger.

The advantage is that no single person owns or controls the database. The network itself verifies the transactions.

For our project we do not need thousands of computers. We can start with a single database on a single server. It will not be decentralized, but it will allow us to explore many of the same ideas.

In this experiment, I effectively act as the central bank. I decide how many coins exist, I maintain the database, and I can verify transactions. This means that trust in the coin is based not only on the software, but also on the trust you place in me.

Step one to making my own crypto is easy. I need to understand what it really is, together with understanding what it is not. Money is something people agree has value. In the distant past, coins were often made from valuable metals such as gold or silver. Later, paper money became popular because it was easier to carry. At first, some paper notes could be exchanged for a fixed amount of gold held by a bank.

Over time, most countries abandoned the link between money and gold. Today, the euro and most other currencies are valuable because people trust that others will accept them in exchange for goods and services.

Cryptocurrencies work differently. They are digital money that exists only on computers. There is no central bank printing them and no vault full of gold supporting them. Instead, cryptocurrencies rely on a network of computers that maintain a shared record of ownership, known as a blockchain. This record makes it possible to transfer coins directly between users without needing a bank to keep track of balances.

Like traditional money, cryptocurrencies have value because people are willing to accept, trade, and use them. Whether that value will rise or fall depends entirely on supply, demand, confidence, and usefulness.

In the next post, we’ll look at the blockchain: the technology that allows cryptocurrencies to work without a central bank.