How To Create Your Own Cryptocurrency With The Latest Technology?
Cryptocurrencies are very popular today. With their help, you can make financial transfers as quickly and safely as possible without intermediaries, earn extra money on currency fluctuations, actively develop your business, and much more. If you decide to create your own cryptocurrency, you need to understand that this is a rather complicated process that will require a large amount of knowledge, skills, and craftsmanship from you.
What is the difference between a coin and a token?
Many people who first encounter the concepts of a coin and a token think that they are the same because both concepts fall under the definition of "cryptocurrency". This is not true.
Coins like Bitcoin or Dogecoin work just like any fiat currency (like the dollar or the euro). It works in a decentralized manner, without being tied to a specific bank. You can use them as payment to buy goods, accumulate, or even trade on various exchanges.
The token is a slightly more complex type of cryptocurrency that belongs to the securities section. They have no use or value outside of a particular environment.
They represent some kind of contract or have some useful value for a blockchain application. They can be digital versions of something. For example, non-fungible tokens (NFTs) are true works of art. They can be purchased at various auctions.
3 main ways to create cryptocurrency
How to create your own cryptocurrency? At the moment, there are 3 main ways how you can create a cryptocurrency:
- Create your own blockchain;
- Modify the ready-made code;
- Use an existing platform.
None of these methods of development cryptocurrency will seem easy to you.
Create a unique blockchain
How to create your own blockchain? This is an incredibly complex process that requires a lot of programming knowledge. This is one of the most difficult ways to create a cryptocurrency, but it will be much easier to strengthen or improve a project carried out using such technologies.
Today some courses last for several months, which are aimed at mastering a new profession, but they require a large stock of programming knowledge. A person who has basic computer skills is unlikely to be able to master them easily.
Fork of an existing blockchain
Forking an existing blockchain is an easier and more reliable way to create your own cryptocurrency. So, you just need to take the ready-made blockchain code on GitHub, change it a little, and come up with a name for the new currency. The hardest part here is figuring out which code elements can be changed and which cannot.
This method was used by the creators of Litecoin, who took the Bitcoin code as a basis. They also continued their experiments and created Garlicoin and Litecoin Cash using the same method.
Use a ready-made platform
This is the simplest and most understandable method, which is suitable for a person who is not familiar with coding information. The most popular platform where you can create a cryptocurrency or token is Ethereum. For many projects of this network, the ERC-20 standard is used.
Seek help from specialists
Not sure how to make your own cryptocurrency? You have 2 options: either you spend a lot of time, effort, and money on mastering all the intricacies of blockchain programming, or you simply entrust all the work to professionals.
Today there are IT companies that specialize in the production of various technologies for creating cryptocurrencies. They will be able to do the job as well and efficiently as possible and complete it on time.
Quite often, this is a little cheaper than if you did all the work yourself because the professionals already have all the necessary knowledge and mechanisms.
7 easy steps to create a cryptocurrency
Creating your own cryptocurrency involves solving a fairly large number of issues, but the most important ones are:
- Choice of consensus mechanism;
- Choice of blockchain;
- Creation of nodes;
- Blockchain architecture creation;
- API Integration
- Creation of interface design;
- Make cryptocurrency legal.
It will not be possible to solve all of the above questions in one day. This is a rather complex process that will require the creators to fully immerse themself in the process. Regardless of whether you decide to make cryptocurrency on your own or give this work to professionals, you must understand the main points of the work.
Choosing a consensus mechanism
A consensus mechanism is a mechanism that confirms the passage of a particular transaction. All nodes must confirm the transaction for it to go through. This is also known as “to build consensus”. You will need a mechanism to determine how the nodes will do this. The most popular is Proof-of-Stake (POS), but there are several others as well.
Also, at the initial stage, you need to understand whether you are creating a regular cryptocurrency or stablecoin. The feature of this type is that it has a reinforcement in the form of fiat currency or commodities to prevent price spikes.
Choosing a blockchain
Blockchain is a kind of habitat for a crypto coin or token, so it is necessary to be responsible for its choice. The choice depends on your technical capabilities and the goals that you want to achieve.
Each blockchain has nodes that allow it to work as it should. It is necessary to think in advance how they will work, what equipment to use, how hosting will work, and much more. The more nodes, the more complex the system, but the higher the security of transactions.
Building blockchain architecture
It is important to understand that after the launch of the cryptocurrency, many aspects of the blockchain operation can no longer be changed, therefore, it is necessary to immediately spend a lot of time creating the blockchain architecture, checking the operation of all systems. This can be done in various test modes. You cannot launch cryptocurrency until all points have been debugged.
APIs can help make your cryptocurrency stand out from others and increase its popularity. Some third-party blockchain API providers can help with this step. In general, this step is optional, but it will help simplify the further progress of the project.
People should be as pleasant and simple as possible to use your cryptocurrency, otherwise, it will not be popular. Web and File Transfer Protocol (FTP) servers should be up to date, and programming on both the front and the back should be done with future developer updates.
In some cases, you need to think about where people will keep their assets, whether they will be able to withdraw money to the card and how the conversion will take place. It is also better to agree in advance with well-known exchanges so that they add your product to the shopping list. The benefit of this solution is that it will become much easier and faster to promote the currency.
Make cryptocurrency legal
For a long time, cryptocurrencies were in a gray zone, and many countries still do not try to develop legislation to regulate them. Those who promoted ICO back in 2017 and 2018 greatly regretted not taking this factor into account. However, there is an increasing trend that the authorities are trying to bring the cryptocurrency industry out of the shadows. Increasingly, you can come across messages about the blocking of work or huge fines. To avoid this, you need to learn more about the specifics of the legal system, or even better, hire a lawyer who will specialize in this matter. Such services will not cost too much.
If you decide to make your own cryptocurrency, then you should be prepared for a lot of work and various difficulties ahead of you. Regardless of whether you decide to create a blockchain yourself or hand the work over to professionals, you need to understand all the processes that will take place, for what you pay money.
Before starting work, it is important to understand what goal you want to achieve, how much time, effort, money, and other resources you are willing to invest. It is also necessary to build a strategy in advance that will help promote your cryptocurrency faster so that it begins to pay off much faster. One specialist is not able to do such a colossal job well, so it is better to immediately hire a large team. This will help you achieve a really good result.