How to Make Your Own Cryptocurrency
The cryptocurrency industry is expanding daily, moving towards a $2 billion market cap and nearly 5,000 assets to choose from. It seems like a new altcoin is making headlines each day, but have you ever wondered where all these coins come from in the first place?
It’s not overwhelmingly complicated to make a cryptocurrency of your own in 2021, provided you have some technical knowledge and a willingness to put in the time. The first generation of cryptocurrency is attributed to brilliant engineers and developers, but that is changing rapidly.
Of course, there are more in-depth approaches you can take to building a currency from scratch, but if you’re the next Satoshi Nakamoto, then more power to you!
In this article, we’re talking about the basics of building a cryptocurrency, some key terms you’ll want to know.
Fundamentals
With the crypto frenzy in full swing, new currencies are being developed and promoted all the time, though most folks still need clarification on basic terminology. So here is a quick glossary to get you started.
Blockchain
The underlying technology of all cryptocurrencies is known as blockchain, which in simple terms, is a digital ledger that records and secures transactions.
These transactions are validated by many nodes per cycle using a decentralized approach, taking place across the internet rather than in a single location. This means all ledgers are public. In this sense, cryptocurrency is considered quite secure and exceptionally transparent, even if prices are unpredictable.
Each node in the blockchain is mining to solve the hash to resolve the pending set of transactions. When a node successfully solves, it is rewarded with a preset number of coins. Then the process starts over.
The node that validates the transaction earns a piece of cryptocurrency that the miner can then add to their wallets or trade.
You will need to understand blockchain technology on a lower level to create cryptocurrencies of your own, and it’s a worthy subject to study even as a casual crypto investor. It’s an emerging technology with many applications beyond currency, so pay attention.
Coins
We hear traders, holders, and speculators on the internet talking about coins all day, every day, but what are they really referring to?
In the context of cryptocurrency, a coin refers to a part of a single, specific blockchain like Bitcoin, Ethereum, or Litecoin.
Since these assets are native to their blockchains and cannot be replicated, they are generally more desirable and generate more interest from investors, especially if the underlying technology is strong. Plus, coins are more widely adopted and can be used to purchase tokens, as well as a growing list of everyday products in stores and online.
As you’ll soon discover, it’s rather challenging to create a legitimate, original coin, which is why there are fewer of them on the market now.
Tokens
While coins are considered the bread and butter of cryptocurrency, tokens built on an existing blockchain infrastructure require less original engineering and coding.
Furthermore, tokens are specific to a particular community and are found on a more limited range of exchanges, meaning they are typically less adaptable and accepted for everyday purchases.
However, tokens have advantages, like representing physical objects, digital services, and even trendy art pieces like NFTs and assets in video games.
Tokens are not necessarily better or worse than coins – they simply serve different purposes. Outlining the intention of your own crypto is a key step, which brings us to our next point.
Reasons to Make a Cryptocurrency
We all know the main reason someone might want to make a cryptocurrency is to pump the price to the sky and become the next crypto tycoon!
But aside from that, there are several other legitimate reasons why creating a cryptocurrency might be a smart move for you and your business. Here are a few to think about.
Security
The prices of certain coins and tokens might fluctuate heavily from one day to the next. Still, the security of cryptocurrency is seen as a major advantage for individuals, businesses, institutions, or whoever else creates the assets.
Elimination of fraud is a key advantage, and there is also the upside of transaction anonymity. Online banking might do a fine job of protecting your information and accounts, but there is no guarantee your assets will be 100% safe or accessible when you need them.
Besides, many individuals and businesses don’t feel entirely comfortable with big banks knowing the full details of all their transactions and holdings. Crypto is in a class of its own in terms of security.
Convenience
To crypto newcomers, the entire process of setting up a wallet, address, and exchange account seem complicated. However, once you complete those initial steps, performing crypto transactions is quite easy.
This is a big part of the appeal of starting your own cryptocurrency because customers and colleagues can quickly move money around without long transaction times or fees from banks.
Lower operational costs and more fluid transactions can be a valuable asset for a business or organization that needs extra speed and convenience in the financial department.
Marketing
Cryptocurrency attracts interest from the public – that’s for sure. When hype and intrigue surround a particular coin or token, there’s no telling what might happen next to the price.
Even jokey meme coins like Doge have had massive success in the past year thanks to smart marketing and a thriving online community. Could you have the next smash hit in the crypto space? It could revolutionize your business and your bank account.
Making a Cryptocurrency
You know basic cryptocurrency terminology and the benefits of creating your own -- now, here’s how to do it.
Existing Blockchain
There are countless existing blockchain infrastructures upon which you can build a token fairly easily. This is the quickest and simplest way to create a crypto token of your own, and there are even hundreds of videos and tutorials that guide you through the process.
Ethereum, NEO, and EOS are very popular platforms for making and launching coins, and the tutorials
Building Your Own
Here is the old-school way to create a cryptocurrency coin, requiring that you build a blockchain from scratch and setting up a network of P2P nodes to validate transactions.
This approach is complex and labor-intensive – we won’t sugar coat it. However, if you’ve got technical know-how and a team of developers in your corner, this might be a worthy pursuit.
We explained the benefits of building a coin from scratch, so take these into account as well.
Support and Promotion
Now it’s time for the fun part of making a cryptocurrency -- coming up with a name, a logo, marketing materials, and a social media presence.
The ability to amplify the excitement around your coin is key, but don’t neglect fundamentals and be able to explain what makes it different.
Remember that just launching your own cryptocurrency does not equate to overnight success. There’s a reason why you haven’t heard of the vast majority of coins and tokens – they aren’t popular and essentially worthless!
Do your best to promote and market your new crypto assets, but don’t write off other methods of crypto acquisition like ESG mining, trading, and good old-fashioned investing/holding.
Conclusion
Crypto has only been in the public eye for about a decade, and there is so much more to explore. Creating a coin or token could benefit your business or yourself, so why not give it a shot?
Sources:
Create a Cryptocurrency | Data Driven Investor