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How to Create your Own Cryptocurrency: All that you Need to Understand

How to Create your Own Cryptocurrency: All that you Need to Understand

We are all living in the advanced age where everything is transferred online which also includes critical data. Everyone thought now there is no going back as these technologies make our lives easier. But with the advancement in technology, it becomes easier for some cunning people to make online theft possible of data money and other critical information out of which larceny money in the form of cryptocurrency was the biggest and was increasing day by day.

 But thanks to some ingenious people in the community, and the advancement in blockchain technology more and more people began to trust cryptocurrency as now it is difficult or we can say next to impossible to change, hack or cheat the system. Because of this effort in this particular technology, more and more people are investing in crypto and looking for the most efficient way to create their own cryptocurrency. This detailed article will help you comprehend the main technical and business aspects of cryptocurrency creation. It will also guide you towards the right path and how coins and tokens differ along with which solutions can be used to make your own cryptocurrency.

What is a Cryptocurrency?

If we have to define cryptocurrency then it is a decentralized digital currency that uses several encryption methods in order to regulate the generation of currency units and to verify the transfer of funds. The three main features of any basic cryptocurrency are anonymity, security, and decentralization. The best and the worst thing at the time is that it is not regulated or tracked by many centralized authorities, governments, or banks.

Many investors from all around the world believe that bitcoin is the original cryptocurrency. It was founded in 2009, by Satoshi Nakamoto. So, it’s been around 12 years since we were introduced to our first cryptocurrency. If cryptocurrency is such a beneficial task, then why are you learning about it a few years ago? Well, wait till the end and we are sure you will get the answer to it.

But it is not true that bitcoin is the first-ever cryptocurrency. According to a detailed report in Bitcoin magazine, there were early attempts in the Netherlands for creating a cryptocurrency that predates bitcoin’s creation by about 20 years. Around the same time, American cryptographer David Chaum also experimented with a different form of electronic cash. Even many startups in the 1990s made efforts at furthering their goals in Digicash. Similarly, there are other currencies that also tried to gain success ahead of their time but I guess the world was not ready for it at that moment.

Blockchain is a decentralized peer-to-peer network that includes data blocks and is an integral part of cryptocurrency. All these blocks are the one which consists of the information about transactions and adhere to a protocol for inter-node communication and validating new blocks. The data which is recorded in blocks cannot be altered without the alteration of all subsequent blocks. There are more than 1500 types of cryptocurrencies including the most popular ones like Bitcoin, Ripple, and Ethereum as the numbers are still growing.  

How Does a Cryptocurrency Work?

Aforesaid, cryptocurrency is an integral part of blockchain technology. Distributed ledger in this technology is built on the consensus algorithms regulating the creation of new blocks. If you are also the participants in the P2P network have to accept a block for it to be registered in the blockchain. There are many types of consensuses with PoW (proof of work), PoS (proof of stake), DPoS (delegated proof of stake), and PoA (proof of authority) are some of the most popular consensuses. Whenever a new block is created a cryptocurrency is issued and it is also used as a reward and incentive for blockchain participants taking part in the consensus mechanism and closing blocks.

How Does a Cryptocurrency Work?

Holders of cryptocurrencies are also known as crypto holders can transfer cryptocurrency assets between wallets and blockchain addresses, exchange it for fiat money, or can participate in cryptocurrency trading. Every person who is on the network can view transactions but the identities of the people behind these public addresses remain anonymous as they are encrypted by unique keys which connect an individual to an account.

Difference Between Coins and Tokens

Now, as we all know what cryptocurrency is let us understand its two large subcategories which are coins and tokens. They both are cryptocurrencies but still, there is a difference between a coin and a token. Once we understand their main concepts it will help you figure out how to make your own cryptocurrency as per your business needs.

A coin works on its own blockchain where all the transactions occur. The prime examples of coins include Bitcoin, New, Emercoin, and Ethereum as all of them operate on a different blockchain. So, in order to make your own coins, you need to first create your own blockchain.

On the other hand a token works on top of an existing blockchain infrastructure like NEO or Ethereum, which is used to confirm every transaction and make them secure. When it comes to tokens then they are usually used for smart contracts, representing everything from physical objects to digital services. But the primary use for tokens is a security token offering (STO), which helps projects and startups fund operations through a crowd sale. This is the main reason why companies are starting to consider the question of how to create a cryptocurrency in the first place.

Advantages and Disadvantages of Cryptocurrencies

Advantages and Disadvantages of Cryptocurrencies

Let us first have a look at the Advantages of Cryptocurrencies in Detail:

Decentralization

It is because of the blockchain that cryptocurrencies are so advanced in this era. As mentioned above cryptocurrency is independent of any authority and makes it so that no one can command the rules for cryptocurrency developers and owners.

Fast, Easy, and unlimited Transactions

An ordered money transaction takes a significant amount of time to get processed and settled. Many times businesses had to wait for days in order to receive money. But cryptocurrency eliminates the unlimited number of transactions and sends it almost immediately to anyone through the crypto wallet, to anyone in the world.

Low Transaction Fees

When you pay or get paid a substantial amount of money then banks and other financial institutions levy considerable transaction fees. Well, you also have to pay a fee for cryptocurrency transactions but the transaction fees are very small in front of the fees taken by banks.

Accepted Internationally

Cryptocurrency is exposed all over the world, thanks to electronic media. Everyone wants to invest in the same which allows you to receive funds from anyone in the world. It also allows you to save money on currency conversion and the fees that you need to pay for international finds transactions.

Anonymity & Transparency 

Because of the distributed nature of blockchains, every transaction is recorded and the records are immune to changes.

Disadvantages of Cryptocurrencies in Detail

Limited Acceptance 

No matter how much cryptocurrencies are exposed in the world, still there are many countries that are hesitant about granting any cryptocurrency their support. There are very limited people who want to make purchases with cryptocurrency. That is why how to use cryptocurrency at all is a very popular keyword among people.

High Volatility

It is true that the cryptocurrency market is not at all stable, with frequent ups and downs even for famous cryptocurrencies like Bitcoin. It is highly risky to invest in cryptocurrency, as you never know whether you are going to make a profitable investment or not.

Transactions are non-reversible 

Once the transaction is made it is not reversible. For the same, you need to request a refund, but it is declined, you have to say goodbye to your money.

Cryptocurrency Storage

You must be wondering what’s with the cryptocurrency storage, but you must have read about the owners who lost their devices, forgot the private key, and could not access their cryptocurrency fortunes. Well, it can happen anytime to anyone.

How to Create a Cryptocurrency: Technical Matters

In order to create a cryptocurrency your need to start by creating an entirely new blockchain with a coin or by forking an existing one and creating a token. To be a cryptocurrency creator through all of them requires at least basic coding skills and an in-depth understanding of blockchain.  Let us understand in a more transparent manner.

Ways to Create a Cryptocurrency

-> Creating a Token – It is the most feasible way to become a currency creator. It gives you the complete take over the blockchain as it may sound like a great idea. But it also comes with certain drawbacks like increased development time, significant spending, and much more.

When you build a token on a strong blockchain then your token runs on money and time, as you utilize the existing decentralized architecture and implemented consensus mechanisms. 

-> Creating a Coin – It is not considered an easy and fast way to create your own cryptocurrency free of charge. You must be an experienced professional in decentralized technologies in order to create a coin. When it comes to its creation it may take as little as 5 minutes, as you can just copy the code of Bitcoin, add a new variable or even change the value of something. But the most important thing is to understand the code and how to change it and that requires extensive coding skills.

Pros & Cons of Building Coins or Tokens

Coins Tokens 
In-depth knowledge of blockchain and coding skills are needed Can be built on the existing and trusted blockchains
Requires the knowledge of new blockchain Easy to create with source code
Blockchain development cost more Creation is fast, easy, and cost-efficient

Popular Solutions for Making a Cryptocurrency

Define your Idea

After reading above you may be considering that cryptocurrency may be fun, but in reality, you need to plan a strategic plan. You need to understand what problems you need to solve with dApp and what audience it will target. To make customers interested in your token during ICO/STO you need to create a value proposition. There are many guides that help you to create an ICO because an idea will only remain an idea if there is no value.

Choose the Right Development Team 

With your decision on developing a cryptocurrency in the best way, you also need to have the expertise of a software development company that is more efficient for your business. It is really crucial to choose the right partner to bring your idea to life. So hiring an experienced team that has worked with the blockchain and cryptocurrency world.

Create Rules for Smart Contracts

A smart contract will have a substantial impact on your project. Smart contracts are like traditional contracts, except for the fact that they are digital, operate on the blockchain, have pre-established rules, cannot be changed, and are executed automatically. However, you can create your own rules representing the main idea behind ICO/STO.

Hire an External Audit Company

An external audit company will really help you in the matter. Investors are usually picky about the projects they choose to invest their funds in. An external audit company will ensure the legitimacy of your project as they carry out ICO/STO audits to establish a reputation of credibility.

Dedicate time to Crafting a White Paper

First impressions also matter in cryptocurrency as they must be provided with papers. If this does not reveal the value behind your idea, they may turn their backs on you. A skillfully written white paper can bridge the gap between you and investors. The white paper must consider the following questions like what is the problem and why is a new solution needed? What roadmap will the project follow? When will tokens be released? Who is on your team, what experience do they have and how can they bring value to the project?

ICO Promotion

After all the above steps now it is time to move on to ICO/STO marketing. It includes guest blogging, social media, overall promotion, press media, etc. You can also use other traditional marketing tools but choose them wisely as you need to clearly define what gives cryptocurrency value.

Create a Strong Community and Support it

In order to be successful, you need to form a strong community and support it. All the top cryptocurrencies have strong communities. So you need to choose the right channels to communicate with the members and try to answer all their queries. A dedicated team that can manage the community 24/7 is the right step ahead.

How to Make your Own Cryptocurrency: Explained with an Example

How to Make your Own Cryptocurrency: Explained with an Example

It is easy to understand anything with an example, so let us understand how to create a cryptocurrency. As mentioned above, you need complex coding skills in order to create a unique token. Here we have the structure of any basic cryptocurrency or token. It will help you start with your own ethereum token.

To start with your own cryptocurrency, you need to use the ETH wallet application and it can be easily found on the internet. Once you have opened this application, you will find a button known as “Deploy New Contract” at the top right corner. Once you click on that, a Solidity Contrast Source Code field will pop up. You need to enter the below code in the field that pops up.

contract MyToken {

/* This creates an array with all balances */

mapping (address => uint256) public balanceOf;

}

The phrase “mapping” stands for an associative array, which associates balances with addresses. All addresses are in hexadecimal format. “Public”, which is bolded, means that anyone will be able to see balance. The above step doesn’t ensure that your cryptocurrency has actually been created. You also need to enter another code underline 4 in the Solidity code box as follows.

function MyToken() {

balanceOf[msg.sender] = 21000000;

}

Your initial token supply will be 21 million. However, you can easily set this amount to anything you like. At the right site click “Select Contract to Deploy” and a drop-down window will open. Click “My Token”.

How to Move your Cryptocurrency

After following the above steps, you will have a smart contract that is linked to a token. But you can’t move them yet so let’s fix that by adding the below code.

/* Send coins */

function transfer(address _to, uint256 _value) {

/* Add and subtract new balances */

balanceOf[msg.sender] -= _value;

balanceOf[_to] += _value;

}

The above code is self-explanatory. We can send tokens and values will be subtracted or added where necessary. However, how do we handle people that want to send more than they possess? In order to stop a contract from executing itself under such conditions.

function transfer(address _to, uint256 _value) {

/* Check if sender has balance and for overflows */

require(balanceOf[msg.sender] >= _value && balanceOf[_to] + _value >= balanceOf[_to]);

/* Add and subtract new balances */

balanceOf[msg.sender] -= _value;

balanceOf[_to] += _value;

}

Now we also need to add some basic information into the solidity field pertaining to our contract proceed like so:

/* Initializes contract with initial supply tokens to the creator of the contract */

function MyToken(uint256 initialSupply, string tokenName, string tokenSymbol, uint8 decimalUnits) {

balanceOf[msg.sender] = initialSupply; // Give the creator all initial tokens

name = tokenName; // Set the name for display purposes

symbol = tokenSymbol; // Set the symbol for display purposes

decimals = decimalUnits; // Amount of decimals for display purposes

}

Best Cryptocurrencies on the Market

As per the Coinmarketcap, there are more than 2000 cryptocurrencies on the market and the number is still growing. So, it is nearly impossible to name the best cryptocurrency on the market. Here we have listed the most popular ones.

Bitcoin

As mentioned above Bitcoin was the first-ever cryptocurrency to be created. And to this day Bitcoin still tops the list of best cryptocurrencies. Bitcoin has a 40% share of the total cryptocurrency market and it will not stop growing in the years to come.

Ether

Ether is another popular cryptocurrency that was launched in 2015. Ether has also shown immense growth over the last few years with a market share of 11.022%. This blockchain Ethereum allows developers to create new tokens.

Dash

Dash is also in the race with Bitcoin and Ether. The best thing about Dash is that it offers a supreme level of anonymity. It operates on a decentralized master code network and the result of its use is almost untraceable transactions. Last year its market cap reached around $800 million.

Zcash

Zcash is also grabbing the attention of investors as it looks promising with its $300 million market caps. Some also state it as an alternative for Bitcoin. It is used with extra anonymity through its Zero-knowledge proofs, allowing them to verify the transactions and also keeping the sender, receiver, and transaction amount a secret.

Ripple (XRP)

Ripple is a cryptocurrency and an international payment system with secure and fast transactions with a market cap of $13,143. It reduces the transaction processing time from 2-10 days to seconds. Many top companies like American Express, Santander, and JP Morgan have already considered the Ripple Payment system and XRP cryptocurrency.

How to Create Cryptocurrency: Costs

With the above steps, it is easy for you to create a cryptocurrency and you can also use it to raise money for your project to use in your applications. But another question that pops up in your head is how much it might cost to make a cryptocurrency? The price of cryptocurrency creation depends on the specific needs of a project and whether you choose to create a new cryptocurrency from scratch or to use an existing blockchain as the underlying technology. Let us understand the cost of cryptocurrency development and look at the expenses.

Stage Time Costs
Development  From 15 min to 5-6 months depends on project to project $1000 – $10,000
External Audit 30 Days $3000 – $5000
White Paper 24 – 40 hours  $1000-$2000
Promotion 1 week to 1 month $2000 per week
Coin Placement  2 – 4 weeks  $3000+ 

Is it Worth it to Create Your Own Cryptocurrency?

Cryptocurrencies are on the rise and if you are able to handle their technical issues, promote them in the community then surely you can have loads of profit out of it. There are many tutorials available on the internet on how to create your own cryptocurrency in 15 minutes as it is not easy. You need to have someone who has extensive experience in the field including blockchain programming. Here is everything you need to understand about cryptocurrency.

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