In the past few years, cryptocurrency has been laying a solid foundation in the financial world. From Bitcoin to Ethereum, Litecoin to Ripple, millions of people trade cryptocurrencies or create ones to earn profits. Using the latest technologies, anyone can now build their unique cryptocurrency.
Creating and launching a cryptocurrency is not as easy as it sounds. From research to planning and execution, there are a lot of mini-step that lead you to your final destination. If you want to know how to make a cryptocurrency, we will share a complete guide to help you develop cryptocurrency and manage it on the platform.
What Does Cryptocurrency Means?
Cryptocurrency refers to an encrypted virtual asset or currency available in the virtual world. People can store, buy or sell these cryptocurrencies in exchange for money like U.S. dollars. This virtual currency is secured through cryptography, making it impossible to replicate or double-spend.
Like any other physical asset, cryptocurrency is that virtual asset that people use for real-world uses like payments, transferring funds or trading in return for non-fungible tokens (NFTs). And now, it is possible to make your own cryptocurrency.
Although, creating a cryptocurrency requires programming, coding and expertise in blockchain technology in order to get a fully-secure and efficient cryptocurrency. , But you can lessen the burden of creating a crypto coin by hiring a blockchain-based cryptocurrency development company for you.
Also read: Becoming an Expert on Cryptocurrency
What Are The Ways To Create Cryptocurrency?
If you want to create a cryptocurrency, there are many ways to do so. Following are the ways that will help you develop a cryptocurrency:
1. Create a Block Chain
Blockchain technology is a new technology that facilitates the easy-going process of transactions and its recording and tracking assets.
Making a cryptocurrency using blockchain technology from scratch is a whole process involving coding skills, the latest market trends and formulation methodologies. There are many online courses and books that hold pre-existing knowledge at a certain level. You can also look at the internet as another reference to create a new blockchain.
2. Use An Existing Platform
Using an existing blockchain platform is a not-so-complicated and easy-to-understand way to create your cryptocurrency. It means you do not have to do the technical part of developing cryptos, like programming or coding.
The resulting product is called a token when you create a cryptocurrency using an existing platform. This digital asset will not be particular to the blockchain it operates on.
Ethereum blockchain is one of the widely used pathways you can use to create a cryptocurrency. The token which you are using Ethereum is called the ERC20 token.
3. By Changing The Code of an Existing Platform
Another way to create a cryptocurrency for you is by changing the code of an existing blockchain platform. This technique involves changing a pre-existing code of an already formed cryptocurrency to create a new one.
The method is undoubtedly an easy way to create crypto rather than creating it from scratch. However, making changes in the codes of an existing model requires programming skills. So, this method requires basic programming knowledge. To develop a digital currency, you must learn the basics of coding, which will help you understand the basics of blockchain and its infrastructure. Not only does it help in the development process, but it helps you in the future maintenance of the currency.
Step-By-Step Guide on How To Make a Cryptocurrency
1. Determine the Objective
The first step of any person building a cryptocurrency is determining the core or primary objective behind the idea. Is it for creating brand value or as a payment system?
You must determine the unique feature that other cryptocurrencies don’t possess, and people would buy it. By doing this, you will get to know the USP of your product. Let’s take the example of Ethereum; its USP is that it allows users to create a decentralized platform for trading.
After setting up the objective, you will have to decide the name of your cryptocurrency to make people aware of a new digital asset in the virtual world.
2. To Design a Consensus Mechanism
The second step of creating a cryptocurrency is to design a consensus. A consensus defines a protocol that allows a particular transaction on any platform. There are two types of consensus in the market: (i) proof-of-work (PoW) and proof-of-stake (PoS).
Proof-of-work is a more-widely used consensus, and currency like Bitcoin uses this type for its use. Under PoW, there is competition against certain miners to validate transactions and further add blocks to the blockchain. The one who adds a block to the blockchain gets cryptocurrency as a reward.
However, Proof-of-stake is a consensus in which no miners compete with each other to add blocks to the blockchain. But, the validators decide the verification of transactions by staking their cryptocurrency in the system.
3. Selecting the Blockchain Platform
After deciding on the consensus mechanism, you have to decide on the blockchain platform on which you want your cryptocurrency. As mentioned earlier, a blockchain platform is where a crypto coin or asset resides. You can choose any platform depending on things like project goal, technical knowledge or your ease of operating.
4. Creating The Nodes
Nodes are integral to blockchain or distributed ledger technology (DLT). A cryptocurrency node maintains the coin’s record and verifies and allows transactions for the same. Deciding on which node you want your coin is therefore essential.
5. Wallet Generation
If you have made a fair decision about what node you want, you will have to generate a wallet. It is the sample place where you will receive payment or any funds in return for your cryptocurrency.
6. Designing the Internal Architecture
The infrastructure of your cryptocurrency involves the coin’s complete functionality, the nodes’ design, and the transaction format. Before submitting the final architecture, be 100% sure about it, as there is no turning back after that.
Decide the supply of your currency coin like the number of coins to create with proper balancing in the market. The more significant amount will lead to a lesser price in the market, while the lesser number of crypto coins will increase its value.
7. Integrating the APIs,
After deciding on the cryptocurrency’s nodes and internal architecture, you must integrate the APIs. API stands for Application Programming Interface that allows communication between multiple software applications.
For example, you can use the PoW system effectively by integrating the Bitcoin API. And for a PoS system, you will need an Ethereum API integration. By doing this, you will get both Bitcoin and Ethereum interaction with your cryptocoin.
8. Legalizing your Cryptocurrency
A very necessary step if you want to create a cryptocurrency is to legalize it. There are well-defined rules and procedures to legalize your cryptocurrency creation.
The process involves license withdrawal from the government and registering the coin with the Financial Crimes Enforcement Network (FinCEN). It is a U.S. agency that deals with virtual currency conflicts like terrorist financing and money laundering.
Make sure that you do research about all the laws made in the name of cryptocurrency-related to banning updates and criminal cases.
9. Marketing and Promotions
Now, when you are all set to present your cryptocurrency to the world, you need to perform some marketing tricks. By doing so, you are making people aware of a new crypto asset in the digital world. You can give any discounts & offers or give it for free for a particular time.
There can be multiple ways to market your product, but the main focus is to make people aware of it in many ways.
We hope that you’ve found your answer on “How to Make a Cryptocurrency” for your business.
What is the Difference between Crypto Coin and Crypto Token?
Both crypto tokens and coins come under cryptocurrency. Both the products are a type of digital asset but comprise one or two key differences.
Cryptocurrency coins are those digital assets that have their standalone position. It means they exist on their blockchain and do not need any platform to exist in the virtual world. Bitcoin and Ethereum are crypto coins with their digital asset comprising a specific value in the market.
On the other hand, crypto tokens are the ones that are built on an existing blockchain like Ethereum with exceptional blockchain infrastructure. They also do not have any asset value outside a specific community.
Another difference between a token and a coin is that a crypto token works on a smart contract, which means more.
Conclusion
Making a cryptocurrency by yourself needs expertise, skills and knowledge of crypto and online trading platforms that most people do not have. Hiring an experienced cryptocurrency developer is a wise decision that people prefer these days. If you want to create a fully-functional cryptocurrency & cryptocurrency exchange development services, Appinop Technologies is the right place for you. With meticulously-designed solutions after proper analysis of the business needs, they design plans accordingly for each client. And with a dedicated team of professionals, there is no chance of any mistake.
