3. How to create your own cryptocurrency?
You may decide to create a cryptocurrency for several reasons. Maybe you want to develop your own cryptocurrency for your business, directly reward your service providers by freeing yourself from traditional currencies, or create a community corner. Cryptocurrencies can also be created for no particular reason, just for fun. There are thousands of cryptocurrencies in the world. Whatever the reason for their creation, 4 different methods can be used. They are available to anyone who wants to create a cryptocurrency.
Where to create your cryptocurrency?
Cryptocurrencies are built on blockchain technology. There are many existing blockchain platforms that explain how to create your own cryptocurrency, whether to make a community coin, for fun, or for any other reason. You can easily issue your coin or token through:
Most tokens are created on Ethereum, but you can create your cryptocurrency on platforms like:
What do you need to create a cryptocurrency?
Not much on these platforms. They make creating a cryptocurrency as simple as filling out an online survey. You need to provide your name, the number of crypto assets to create, a few other details and that’s it.
Remember, if you use an established and recognized blockchain, your cryptocurrency will be more secure and can benefit from other integrated features.
It is also possible to use automatic generators to set up your cryptocurrency. This process only takes a few minutes. However, it should be noted that fraud cases are numerous in this area and require vigilance.
If you wonder how to create your own cryptocurrency from scratch, you will first need to build your own blockchain, which will require a lot more work but also offers more freedom and flexibility. Control over your cryptocurrency and what you can do with it.
Once you own a cryptocurrency, you still face many challenges. The hardest part is maintaining your cryptocurrency, especially if you created it yourself. This may require further programming, building a network of computers and investing in marketing to popularize your cryptocurrency and exploit it.
WHICH SOLUTION TO CHOOSE TO CREATE CRYPTOCURRENCY AND TOKENS
We, on our part, recommend BSC, Ethereum, or Solana. All of these networks provide the necessary ways to create different tokens. They are based on existing standards. For tokens, these are BEP – 20 or ERC – 20. Almost every crypto wallet provider supports these two networks.
The ERC-20 standard is based on the Ethereum blockchain, and BEP-20 is part of the Binance Smart Chain (BSC). The networks will allow you to create and customize smart contracts accordingly. With them, you will create your own token and DApps application. DApps are fully decentralized. With them, you will create an ecosystem for your cryptocurrency, which will improve your token.
Also consider using a sidechain, which is an additional blockchain. It doesn’t work on its own. It is always, at least to some extent, connected to the main blockchain. Both chains are interoperable, which ensures free flow between them. Using a sidechain that leverages the security of the larger chain will give you more customization options. An example of such a connection is the Polygon network, which uses Ethereum but is cheaper and faster to use.
You can always use developers who give you ready-made parameters and rules. They will create a ready-made token for you. Of course, this is a paid service, but for those not familiar with smart contracts, this is definitely an easier option.
What about when you’re ambitious enough to want to create your own blockchain and coin? Well, you will need a whole team of developers and industry experts. Even if your idea is a fork of some blockchain, you will still have a lot of work involved in setting up the network.
Token vs Coin
You already know the substitute for creating your cryptocurrency. At this stage, you need to consider what you want to create – a coin or a token. Coins have their blockchain. Coins have their uses. They are used to paying transaction fees, place bets, or are used in management. You can also use a fork of the previous blockchain to create it. Bitcoin Cash is an example of this. Still, creating such a project requires a huge amount of programming knowledge. Getting new users is also a challenge.
A token already has a blockchain – it is built on top of it. In practice, it can have several functions, similar to coins. However, they are usually useful, and you can use them in your projects. It is also used to charge for some transactions, e.g., in the PancakeSwap ecosystem. The most common token standard is ERC -20, which is issued on the Ethereum blockchain.
Given what you have already read, creating a token is definitely simpler. A coin is more time-consuming. Let’s compare:
|Requires a blockchain that you maintain yourself.||You can build it on an existing blockchain.|
|You need to find users and project validators to help you survive.||Has a user base.|
|Success will be much higher than if you created a token.||You will build it with publicly available tools or open-source software.|
|Requires advanced knowledge of blockchain and programming.||The process of its creation is relatively inexpensive|
|Requires time and monetary resources.||Its creation is faster and simpler.|
CREATING YOUR OWN CRYPTOCURRENCY
You need to start by creating a brand new blockchain. In this case, you should know at least basic coding skills and have a deep understanding of blockchain. However, if you are a professional in decentralized technologies, creating a coin will be a piece of cake for you.
Once you’ve decided whether you’re creating a token or coin, it’s worth considering a few more key areas before proceeding:
- Consider the utility of your cryptocurrency. They play many roles. They can act as a key to accessing services or represent a financial asset. Define the features of your project from the outset.
- Design the economy of your cryptocurrency. It is what governs your crypto. Include supply, distribution method, and valuation. Even if the idea is good, if you don’t encourage users to buy in, the plan may fail.
- Laws that can be a trap for you as a creator. Every country has different laws and rules regarding crypto. Some even have bans on their use. Think about and analyse all the legal problems you may encounter along your way.
- Strategic plan and idea definition. Cryptocurrencies are cool, but you need to understand their ecosystem before proceeding. What issues does the dApp solve, what audience will it target. Create a value proposition to attract your customers during the ICO/STO.
- Create your own blockchain on which your cryptocurrency will be based. If you don’t feel up to it, hire someone to create and design the blockchain.
- To confirm and verify transactions on the network, choose a consensus mechanism that suits you. The vast majority of blockchains use Proof of Stake. Mainly because it has low hardware requirements and many variations. Bitcoin uses Proof of Work because it is considered more secure. However, it is expensive and environmentally unfriendly.
- Create rules for smart contracts. Such a contract will have a massive impact on your project. Having predetermined rules, and you will not be able to change them during. They are executed automatically.
- External audit firm – a must-have. The audit will check the blockchain code and its cryptocurrency. If it finds any security gaps, you will be able to fix them at an early stage. In addition to this aspect, this process will give you recognition according to potential investors or users. A third party auditing company ensures credibility. Then even picky investors will consider investing in your project.
- Whitepaper – Create it! First impressions are delivered with papers. A skilfully written whitepaper will be like a stable bridge between you and the investors. Include answers to the following questions: What is the problem? What innovative solutions are needed? Roadmap? What is the project team like? What values does it bring?
- ICO/STO Marketing. Use all social media available to you – guest blogging, general promotion, press media, and anything else that comes to mind. In all posts or news stories, clearly state what gives value to the cryptocurrency you are creating.
- Community. An indispensable part of the success of your digital currency. Support it and answer the questions it raises. Bitcoin? Ethereum? Ripple? And many others. All of them, however, have strong communities. Ideally, you would have a dedicated team to contact your community 24 / 7.
With the above steps, you already know how to create your cryptocurrency. It’s time to think about the costs. We are already helping with the answer. Everything certainly depends on the needs of the project and whether you are creating a cryptocurrency from scratch or using an already existing blockchain.
We will count the costs in dollars. On average, projects starting from scratch are created in 5-6 months. The estimated cost of such a project is around $10,000. Next, we move on to external auditing. Here the price depends on the reputation and skills of the company. However, we recommend not to save on it. The expected price ranges from USD 3,000 to 5,000. In the case of writing the White Paper, we also recommend getting help from specialists. This is an expense of USD 1000 – 2000. These are the most important costs. We do not count the side ones.
Valuation of your cryptocurrency after creation
There is no point in developing a cryptocurrency if no user is interested in it. For this reason, after successfully creating a cryptocurrency, the next step is to conduct an “Initial Coin Offering” (ICO). This is the initial coin offering created.
This post-creation stage involves fundraising. It involves offering investors tokens, or a few units of the new encrypted currency, in exchange for compensation in well-known currencies such as Bitcoin or Ethereum. This article will help you learn more.
In this whole process, the most difficult thing is therefore not to create a cryptocurrency, but rather to secure the support of a community. Therefore, it is significant to succeed at this stage if one aspires to create a cryptocurrency and see it prosper.
And this is the final stage of our tutorial. A question has probably popped into your head – given the above facts, is it worth creating your cryptocurrency? If you can deal with the technical issues, promote it and are ambitious, then it is worth it. Interest in cryptocurrencies continues to grow and can certainly make a big profit. We realize that this is not an easy job. It requires significant effort. Nevertheless, if you gather the right team that is experienced in this field – it will be a piece of cake.