You might have heard of Bitcoin, Ethereum, and some other cryptocurrencies that have taken the world by storm. Now, you might be looking to get into it somehow! So, what if you create your own cryptocurrency? How to create a cryptocurrency?
Let’s start with the basic definition of Cryptocurrency:
What is cryptocurrency?
Well, cryptocurrency is defined as a virtual currency i.e shielded by cryptography and it is backed up by blockchain that serves a digital wallet in order to exchange the products and services.
To start building a cryptocurrency three important things need to be considered:
1: Cryptocurrency should have a purpose.
2: Community’s trust and confidence.
3: Complete knowledge of blockchain, coding, and Cryptography.
How to Create a Cryptocurrency?
Keep reading to know how to create a Cryptocurrency
While creating cryptocurrency, first you need to know that it is classified into two main categories:
1: First, creating a coin that contains its own blockchain.
2: Secondly, you need to build a token either through the applications like NEO, Ethereum, etc.
A cryptocurrency consists of both coins as well as tokens. However, a coin has its own blockchain while a token is made on an existing blockchain. Thus, a blockchain can have thousands of tokens while a coin can have only one.
Some Differences between Coins and Token:
|It requires the creation of a new blockchain.||This can be built on existing blockchains.|
|This requires both blockchain and coding skills||It is relatively easy to create with code|
|Requires more investment.||It is easier and cost-efficient.|
Before you jump into the development of creating your own crypto there are some business-related decisions that you need to consider:
So, the following has been defined as some steps for creating a cryptocurrency:
1: Define the purpose:
If you want to create a cryptocurrency then there should be a particular reason for its existence. Otherwise, what reason do people have to use cryptocurrency?
You must have heard about Ethereum! Well, it is just an example of cryptocurrency with a strongly defined purpose. It is used for fast and feeless digital payments. Once you are defined with the purpose of your cryptocurrency then you need to be sure that you explain it well along with the aspects.
2: Consider Legal requirements:
As the blockchain has started growing so has the regulatory analysis too. Therefore, you need to make sure that whatever you are doing should be legal throughout the entire process. You can consult a legal professional too in case if you are having any doubts.
3: Look for Budget:
When creating your cryptocurrency is not an easy task and it will require some financial resources. So, you need to take care of the things like its development, documentation, and most importantly marketing.
4: Hire Development Team:
If you are developing crypto by yourself then surely you will need a strong developer that helps in bringing the idea to your life. However, this might be difficult as the demand for blockchain developers is very high. So, finding the right team becomes very crucial and the blockchains only deal with the people’s hard-earned money and it needs to be technically right.
5: Promote your own project:
While making your cryptocurrency might seem impossible but when it gets done then you need to remember that you need to promote it too. You might be having the best project but if no one knows about it then it will be hard to make progress and grow the network further.
Therefore, you must start promoting your project on either Press Releases, Social media, or on popular channels like Reddit, Discord, Telegram, Twitter, etc. The blogs are also a great idea to start promoting the project.
6: Nurture your community:
Once you are done with promoting the project, then you need to make sure that you engage and nurture your community well. Various projects have their own community management team for growing the users. When you start nurturing your customers then they will become your biggest fans. Also, being a marketer, you cannot neglect them.
Some of the benefits of Building your own Cryptocurrency:
1: It eliminate the fraud risk.
2: Low operational costs.
3: Immediate Transactions.
4: Transaction Anonymity.
5: One can get security for funds.
6: Access to new customer base.
Now, that you know How to make cryptocurrency and how it can boost your business, let’s focus on the main steps that you need to take in order to build a blockchain.
How to build a blockchain
1: Clear your objectives:
Is your business interests lay in the smart contract area, data, authentication, and verification? You must clearly define all your objectives at the very beginning.
2: Choose a mechanism:
To operate blockchain smoothly the participating nodes must agree that on which transactions should be considered to the block. Thus, a proper mechanism or protocols should be there. You must choose from the best for your business objectives.
3: Pick a reliable blockchain platform:
It is important that your choice of a blockchain will depend on the mechanism that you have selected.
Here we will show you some of the most popular blockchain platforms:
- Block Starter
- Coin list
- IBM blockchain
- Big Chain
- Chain Core
4: Look after API’s (Application Programming Interface):
You have to make sure that whether the blockchain platform of your choice is providing you with the pre-built API’s or not. However, if your platform doesn’t come with it then you don’t have to worry as there are a lot of reliable blockchain API that is provided by you.
5: Design the Interface:
As we all know that communication is a key and well-thought interface that ensures smooth communication between your blockchain and its participants.
So, here are few things that you need to consider:
- Web, mail and FTP servers.
- External Databases.
- Front-end programming languages like (HTML 5, CSS, PHP, C#, Java, Python and Ruby)
6: Make it legal:
Either slow or fast the law is catching up the cryptocurrencies and you should better protect yourself from surprises. This means that you should look into the trends around cryptocurrency laws and regulation and also the direction they are headed.
Pros and Cons of Cryptocurrency:
Today, cryptocurrency has become a hot topic for everyone. So, if you think about how to create cryptocurrency then you first need to know about its pros and cons. Read on further, and learn more about cryptocurrencies and why should we use them in our business operations.
Have a look at the pros of Cryptocurrencies:
The most important thing that underlies Cryptocurrency is Blockchain. It usually makes Cryptocurrency independent from any authority and one can dictate the rules for both the cryptocurrency as well as owners.
2: Fast Transactions:
The authorized transactions indeed take a significant amount of time to be processed and settled. Thus, your business will end up in waiting days to receive the money. But with the help of cryptocurrency, you can create an unlimited number of transactions and send them immediately to anyone who is having a crypto wallet. You can send the money to anyone, anywhere in the world.
3: Low transaction fees:
Both the banks and other financial institutions charge considerable transaction fees. But it also doesn’t mean that you do not need to pay a fee for cryptocurrency transactions. However, the amount that you need to pay is relatively very less as compared to the others.
4: Accepted Internationally:
Both the sender and the recipient of funds can indeed be in different parts of the world and still, they can exchange their cryptocurrency easily. You can either save money on the currency conversions and always accompany the international fund’s transactions.
With the help of the distributed blockchains, each transaction gets recorded and the records are immune to changes. But at the same time, if a crypto address has not been publicly confirmed then no one will get to know who made the transaction and who has received the cryptocurrency.
Thus, companies must think seriously about making a cryptocurrency. However, there are some drawbacks too. So, read it also!
Cons of Cryptocurrency:
Some of the disadvantages of Cryptocurrency:
1: Limited Acceptance:
It has been that most of the countries feel very hesitant about granting cryptocurrency as their support. In today’s life, there are limited possibilities for those who want to make purchases with their cryptocurrency. So, rather than asking how to create cryptocurrency the people often wonder how they can use it.
Some of the users think that how they can get started with cryptocurrency and they forget about the most important factor i.e high volatility.
The cryptocurrency market is overall not stable properly and it comes with frequent ups and downs even in most cryptocurrencies like Bitcoin. So, high-risk in involved in cryptocurrency as you will never know whether it is a perfect investment for you or not.
3: Non-reversible transactions:
By entering an incorrect cryptocurrency can become the reason for costing your money. Also, there is no way to reverse the transaction back. Therefore, you might need to send a request for a refund but if it gets declined then you should be ready for losing your money.
4: Cryptocurrency Storage:
Possibly, you have read the stories about cryptocurrency owners who have lost their devices and forget their private key and thus, they couldn’t access their cryptocurrency fortunes. So, you need to remember that these sorts of situations can get happen to anyone and anyone can lose their money accidentally.
These are some of the pros and cons of Cryptocurrency and they should be taken into account when you try to consider creating a cryptocurrency that will facilitate your business goals. Hence you need to decide the purpose of creating the cryptocurrency for your company.
Solutions for making Cryptocurrency:
However, there are few blockchains that provides a mean for creating a token. This involves Ethereum, NEO and some of the other most popular tools. Whenever, we talk about how to create a cryptocurrency then you must hear about one of these tools.
Ethereum has become the first blockchain that is known for offering the token creation service. Due to its strong position on the cryptocurrency market, its trust level has been increased among users. Usually, all the tokens are built on Ethereum and use the ERC-20 standard. Also, its development process is much easier.
Basically, the NEO blockchain is aimed at the smart economy and utilizes the NEP-5 standard. Like Ethereum you can the high-level programming language. It includes JAVA, Python and thus creates your own token on top of it. HTTP and API are also available for interaction with the blockchain.
This token can be created with C++ or some other language. It offers great scalability and the person can do a vast number of transactions per second. Moreover, the name of this blockchain can get raise when discussing how to create a cryptocurrency.
|Programming Language||Ethereum own’s programming language (Solidity)||High-level Programming language like Python, JAVA, C#||C++|
|Wallets||Numerous options||Various options||Frequent Options|
|Virtual Machine||Native Virtual Machine||Native Virtual Machine||Native Virtual Machine|
|Number of transactions||15 trans (per second)||10,00 trans (per second)||3000+Trans (Per Second)|
Here the table shows you the main features of creating new cryptocurrency with Ethereum, NEO and EOS.
Wrapping up: We hope that you enjoy this blog and find lots of interesting facts and information here. As we have come up at the end of this guide so you can start building your cryptocurrency business.
The approach that here we have introduced requires programming knowledge and a fundamental understanding of blockchain technology. You can read this complete guide and then take initiative whether you want to invest in cryptocurrency for your business or not. Also, you must look that How much does it cost to start a Cryptocurrency and then take the steps for it. So, look at these things wisely.