After dabbling in cryptocurrencies for a good amount of time, trading, and investing in them, you might be considering what it is like to create your own cryptocurrency. Whether that’s why you are here or simply curious as to what it takes to create a new cryptocurrency, we have all the information you’ll need.
In this post, we will talk about the three different ways you can start your own cryptocurrency:
We will also take a look at the things you need to consider when creating a new cryptocurrency.
The method you’ll adopt to create your cryptocurrency will depend on how comfortable you are with coding and advanced technical knowledge.
With this option, you start from scratch. You write your own code and create your own ecosystem aka blockchain for the cryptocurrency to exist. You will need advanced coding skills and a good understanding of blockchain technology to build one. While this could be a cumbersome and time-consuming process, it also gives you a lot of design freedom as to how you would like the blockchain and coin to work. If you have something truly innovative in mind then this might be a good option to consider.
Alternatively, if you would like to have design freedom but do not have the level of understanding creating a new blockchain requires, you could always hire a blockchain development company. Popularly known as BaaS (blockchain-as-a-service) these companies help create new blockchain networks, and cryptocurrencies, and also provide support to maintain them.
While some of these BaaS create blockchains from scratch others might build them on their native blockchain network. Which one you choose will depend on the degree of customization they provide as you would want your blockchain to mirror the concept you have in mind.
Following are the top 5 BaaS in the crypto ecosystem currently:
If the last method is a bit much then you always have the option of modifying an existing blockchain instead of building one from scratch. This will also need technical knowledge and a thorough understanding of both programming and blockchain but will be a lot quicker as existing infrastructure is already available.
You will need to use the source code of an existing blockchain and create your own blockchain and cryptocurrency. You can do this by downloading and modifying the code from the GitHub platform, as codes of most blockchain networks out there are open source.
This also gives you some ability to work on the design objectives or customizations but only as much as the code allows. It will be wise to collaborate with a blockchain auditor for some legal advice as well as scout the network for flaws, bugs, and loopholes once it is ready.
You can use an established blockchain like Ethereum or Binance to create your own. While this is the easiest way of going around it cost-effectively, it also means you’ll have fewer customization options for your token. Also, note that when you build your blockchain on an existing blockchain your digital asset is referred to as a token and not a cryptocurrency. The operation and continuity of your blockchain will also depend on the fate of the blockchain you are hosting it on since if it ever goes down your token’s ability to be transacted will also be compromised.
To begin with, you can look at established platforms like Ethereum and Binance Smart Chain. Once you have chosen your platform, the time taken to create your new token will depend on the level of customization you seek. Once it’s ready, you are all set to start minting new tokens. If you are using one of the above-mentioned platforms to create your new token, then you might not need to invest in a legal counsel or professional auditor before issuing your new batch.
Here are a few things you need to consider when creating your crypto:
The first and foremost thing crypto investors look at when buying crypto is the purpose behind it. Think hard and determine the answers to the following questions.
The use case should have the entire literature allotted to it. This is known as the whitepaper.
Here are the 10 best crypto ICO whitepapers out there which can serve as a reference for yours.
The purpose behind your crypto will also shed light on who will control the blockchain.
Will it be a permissionless one or a permissioned, private blockchain, like Quorum, Hyperledger Fabric, or R3 Corda?
Will your blockchain be centralized where the supply of coins is matched to the underlying security or is it decentralized where the users of the blockchain have the right to vote on how the supply should be managed?
Cryptocurrency is gradually coming into the radar and purview of regulators who are increasing pressure to ensure just practices and proper regulation in the space. This means you’ll need to ensure that your cryptocurrency is within a jurisdiction that allows it.
Find out more about countries where cryptocurrencies are allowed here.
Once you have sorted the legality and use case for your cryptocurrency, the next thing you will need to ascertain is how many coins you’ll need to create. How are they going to be released and how are you going to manage the coins or tokens once they are in circulation?
Will your tokens be mined or minted? How will you motivate the users on your network to maintain your decentralized platform? How will you reward them?
What will be the gas like for transactions and how will you be burning your digital assets to maintain control of the circulation?
These are the questions you need to answer before you start minting your tokens or cryptocurrency.
The costs to build a new blockchain or modify an existing one, the cost of the audit, legal counsel, design, marketing, and some ancillary expenses that are required to get the blockchain started need to be considered before starting the process of cryptocurrency creation.
The process will demand your time and money. Moreover, creating a cryptocurrency is the easy part, maintaining it and growing demands a lot of mettle and persistence. If you would like to test the waters by creating a token on a platform like say, Ethereum, you can use free tools like WalletBuilders to create a standardized one for free.
This post is just the beginning of the world of creating your own blockchain and crypto, but it gives you the framework and basic checklist on how to go about it. While you might be passionate about your idea of creating a new cryptocurrency, it always serves to see from the users’ point of view as well. Will they find it beneficial? Would they like to mine or stake it? Does the purpose drive them to be strong members of your community helping the crypto grow and thrive further? Are you ready to foot the initial expenses that come along with establishing a new cryptocurrency?
The path is ridden with questions to ponder and things to do. The best way is to analyze your exact requirements, and your needs behind creating the cryptocurrency, and ensure that it adheres to legal policies and regulations all the way. There are quite a few open-source and free tools available for you to test the theory and put it into practice before you take the actual plunge.
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