Gryphon Digital Mining's Guide on How to Create a Cryptocurrency
Maybe you’ve thought about investing in crypto, or you’re just starting to learn more about the subject as you hear more from friends on social media and financial headlines.
Trading and holding crypto is all good, and so is mining Bitcoin if you know what you’re doing. But have you considered the possibility of creating your very own cryptocurrency for yourself or your business?
The idea might seem over the top, but think about it. There are thousands of new coins and tokens hitting the marketplace each year, and they must be coming from somewhere!
People create cryptocurrencies for business purposes, charity fundraisers, experimental tech projects, or just for plain fun.
Let’s walk through the different ways to make your own cryptocurrency in 2021, from concept and creation to your initial coin offering (ICO) and beyond.
Begin with a Vision and Goals
Just like any great invention in engineering or tech, the creators of major cryptocurrencies like Bitcoin had a strong vision and intention from the start, captured in white papers and sketches that we still analyze today.
This is an important step to take when starting your own cryptocurrency, because you want clear parameters for your coin or token, as well as a practical purpose that you can quickly summarize in an everyday elevator pitch.
Is your aim to overtake Bitcoin as the world’s greatest digital store of value? Maybe you want a series of tokens for a virtual universe like an art gallery or online game. If you just want a fun and unique marketing tool for your brand, that’s cool too.
The point is that you need a vision for how your cryptocurrency looks, feels, functions, and intrigues new investors to hop on board, whatever the value proposition may be.
Method 1: Create Coins With a New Blockchain
If your goal is to create a cryptocurrency completely from the ground up, you’ve got a challenge ahead. This requires that you build a brand new blockchain network to support the generation and transactions of the coins themselves.
Here’s how you might go about creating a new blockchain and native coin from scratch.
Do it Yourself
Put your technical skills and patience to the test by building a blockchain with nothing but your own effort and ingenuity.
If you know a bit of Python, that’s a great starting point. JavaScript, C++, Node.js, and C# are some other popular languages used to build the foundations of the world’s most powerful blockchains.
You’ll need to make some key decisions here, including how coins are mined, how blockchain decisions are made, and whether there is a limit on the number of coins that can be generated over time.
Determining the consensus algorithm is also crucial at this stage, and the most popular options include proof-of-work (PoW), proof-of-stake (PoS), and delegated proof-of-stake (dPOS), all of which have pros and cons that need weighing.
Blockchain Developers
If the DIY approach sounds a bit overwhelming, you can always hire a team of professional blockchain engineers and developers to build the technology you envision.
Keep in mind that this process will not be cheap if you want it done right. Blockchain developers are highly sought-after at the moment, and charge high fees for their work.
We only suggest taking this route if you have a very clear purpose for a cryptocurrency that will directly enrich your organization and deliver a strong ROI for the money you put down.
Method 2: Create Tokens On an Existing Platform
Unless you’re dead-set on building a proprietary blockchain and accompanying coin, you can simplify things by using an existing platform to create tokens.
Tokens may be more limited in their use since they’re often restricted to a particular exchange or community, but a surprising number of popular altcoins have been built with this approach.
Here are a few ways you can bring your idea for a token to life on a blockchain network that already exists.
Popular Blockchains for Tokenization
There are plenty of great platforms that allow users to create tokens via “smart contracts”, which is how many novel altcoins have come about in recent years.
ERC20, on the Ethereum blockchain, is definitely the leader of the pack in this category, responsible for tokens like Chainlink, Tether, Wrapped Bitcoin, and Basic Attention Token.
Many token creators have also turned to the EOS platform, which excels in the development of dApps and application-specific currencies.
The Stellar network is also rising in popularity for token creators, along with the Binance Smart Chain and many others. Read up on each one and follow tutorials to use these platforms as launchpads for your very own apps and tokens.
Blockchain-as-a-Service
Want all the benefits of cloud computing, third-party development, and blockchain all rolled into one technology? Blockchain-as-a-service deserves a look.
All the major players from Microsoft to Amazon are dabbling in BaaS business models, which allow small creators to jump on major established networks and bring their cryptocurrencies to life far more efficiently.
You do forfeit a certain amount of control when using BaaS, but this is a part of the tradeoff you must consider.
Method 3: Fork from Existing Blockchain
Many famous crypto projects have been the result of a “fork” from existing blockchain technology. This means that an alteration is made to the code of a platform, sending it in a new direction with different features and capabilities.
This is a popular way to create a new cryptocurrency, so don’t overlook it as an option.
Hard vs. Soft Fork
The key difference between these fork types is the compatibility between the new project and the existing one.
With hard forks, the new tech is not compatible with the old, while soft forks allow for both projects to interoperate.
Both are valid options for anyone starting a cryptocurrency, but soft forks are far easier to facilitate in terms of creation and ongoing management.
Bring Your Crypto to Life
With the technical details of your cryptocurrency handled, you can focus on giving your new coin or token an identity and bringing it to the public.
Branding
Give your crypto a name, design some marketing materials, write some copy for your website, and make the messaging clear to everyone who comes across it.
The point is to simplify the purpose of your currency as much as possible, explaining the benefits and how it’s different from others.
All great crypto projects are also great brands, and yours should be no different.
Integration and ICO
When it’s all systems go for your cryptocurrency, connect with exchanges and see if you can have your new digital asset traded on one of these platforms. The more exposure you get to the public, the bigger the chance to hit it big!
You can also coordinate an initial coin offering to raise funds for your venture and attract newcomers to the project. This is your chance to generate some hype around your project and see how it stacks up to competitors.
Make Your Crypto Project a Reality
It’s hard to believe that 10 years ago, few people knew what crypto even was. Now, everyone is rushing to trade crypto or even make their own coins and tokens!
This just goes to show how rapidly the crypto trend is gathering momentum and changing the world.
Sources:
How to Create Your Own Crypto | Lifehacker