How to Make Cryptocurrency

How to Make Cryptocurrency

23.05.2022

Entrepreneurship has never been more diverse in the world today. With the advent of blockchain technology, you can create a profitable business by creating cryptocurrencies. This comprehensive guide is what you need to get started; you'll learn:

  • What is crypto, and how does it work?

  • The different methods used to create cryptocurrency

  • The stages of the creation process

  • And how to make your own cryptocurrency

Before developing your cryptocurrency, you must decide whether you are creating a crypto coin or a crypto token. What's the difference? Crypto coins operate directly on their blockchains. When you use Ether to conduct a transaction, it is done on the ethereum blockchain. Bitcoin transactions are also recorded on the bitcoin blockchain. These two are crypto coins.

How to Make Cryptocurrency

On the other hand, Crypto tokens do not have their blockchain. They work with other crypto coins’ blockchains. Tether (USDT), for example, is a token that operates on the ethereum blockchain.

Similarly, crypto coin transactions are handled by blockchain directly, whereas tokens depend on smart contracts. Crypto tokens are also easier to develop with smart contracts built on an existing blockchain. NFTs are good examples of tokens.

What is a Cryptocurrency

Cryptocurrency is a digital currency that uses blockchain-based encryption techniques to control the creation of cryptocurrency units and verification of fund transfers. A cryptocurrency differs from fiat money with the following properties:

  • Decentralization

  • Security

  • Anonymity

There are more than 10,000 cryptocurrencies, and Bitcoin, Ethereum, and Tether are some of the most popular ones. Vitalik Buterin created Ethereum, and he's worth $1.5 billion today. So, learning how to create a cryptocurrency might be the one thing you need to know before you hit the millions!

Before you can create your own cryptocurrency, you must understand what a blockchain is. A blockchain is an open ledger that provides a transparent and secure way of validating and recording transactions made with a cryptocurrency. Every cryptocurrency is built to operate on a blockchain, but is creating cryptocurrency easy? If you have the right knowledge and resources, the process becomes easier.

Ways to Create a Cryptocurrency

Different methods are used to create crypto coins and tokens. Hence, to make your own cryptocurrency, you need to decide if your crypto will be a coin or a token.

Creating a Coin

When exploring options on how to create coin, note that it requires expertise in the field of decentralized technologies. All coins and tokens rely on specific blockchains for their operations. To create cryptocurrency coin, you need to build a new blockchain or fork an existing one. The former can be time-consuming, while the latter is usually a quick process and can take as little as five minutes.

Forking a blockchain means copying the blockchain's code and changing it by adding a new variable or changing a part of the code. The next step is to get users to use your coin, which requires marketing. You'll need the help of a team to fast-track these processes and deliver quality services. Hence, ensure you factor staff payments into your blockchain project budget.

Creating a Token

The difference between tokens and coins is that coins require a new or forked blockchain while tokens work on existing blockchains. Although owning a blockchain sounds great, you'll have to spend money on blockchain development which takes a lot longer to complete. A more realistic way to create a cryptocurrency is to fork a coin. When you build a token on a reliable blockchain, your token operates on a network with strong security measures. In addition, it costs less and takes less time since you're leveraging existing technologies to create your own cryptocurrency.

The following table describes the pros and cons when you create crypto coin or token.

Coin

Token

Necessitates the creation of a new blockchain

Can operate on existing blockchains

Requires deep coding skills

Easy to build using open source code

Cost-intensive

Cost-efficient

Fork an Existing Blockchain

To fork a blockchain, search for the open-source code on GitHub and modify it. This process demands an understanding of how to change the existing code. The modification you make to the blockchain can be based on solving a problem or limiting features in the code. After which, you can launch your coin under a different name. An example of a forked cryptocurrency is Bitcoin Cash (BCH), a fork of Bitcoin, and Ethereum Classic (ETC), a fork of Ethereum.

Use an Existing Platform

How to Create Cryptocurrency

There are several existing platforms for making a new cryptocurrency. The most popular and easy-to-use blockchains used to fork a coin are Ethereum, NEO, and EOS. Let's delve deeper into each!

Ethereum

Ethereum is the first and one of the most trusted token creation services in the crypto industry. The tokens on Ethereum's blockchain are based on the ERC-20 standard. You can learn how to create your own cryptocurrency coin on the Ethereum using Solidity, Ethereum's programming language.

NEO

When exploring how to make a cryptocurrency for free, NEO is another good option to consider. It focuses on operating on a smart economy and is based on NEO's NEP-5 standard. Unlike Ethereum, you can use different programming languages to create a token, like Java, JavaScript, C#, Kotlin, and Python.

EOS

Aside from Ethereum and NEO, when examining how to create new cryptocurrency, another suitable blockchain is EOS. The blockchain is very scalable and completes transactions at top speed. You can create tokens based on EOSIO.Token standard using c++ or another Web assembly compatible programming language.

The following table summarizes important information relevant to using Ethereum, NEO, and EOS blockchains for creating a token.


EOS

NEO

Ethereum

Programming Language

C++ and other Web-assembly compatible languages

Most high-level programming languages

Solidity

Token Standard

EOSIO.Token

NEP-5 Standard

ERC-20 Standard

Wallet

Varied options

Varied options

Varied options

Hardware Wallet

Yes

No

Yee

Virtual Machine

EosVM

NeoVM

Ethereum Virtual Machine

Consensus

Delegated proof-of-stake (DPoS)

Delegated Byzantine Fault Tolerance (dBFT)

Proof-of-Work(POS)

Transactions per second

3000+ per second

10,000 per second

15 per second

Use Case

Smart contract

Digital assets and smart economy

Smart contract

8 Stages Of Cryptocurrency Creation

The following represents the step-by-step process of creating a cryptocurrency from scratch to finish. Let's dive in!

1. The consensus mechanism

A consensus mechanism is a strategy used to validate transactions on the blockchain network. To verify transactions, all nodes must agree or come to a consensus to prove that the transactions are valid. The consensus mechanism used to determine how the nodes reach an agreement varies. Examples of consensus mechanisms include proof-of-work (PoW), proof-of-stake (PoS), proof-of-authority (PoA), etc.

2. Blockchain choice

how to create your own cryptocurrency

The next step on how to develop cryptocurrency is to select the blockchain environment for your coin or token to operate. The deciding factor for your blockchain choice depends on the consensus mechanism you've selected. Other factors include your tech skills, project objectives, and overall budget.

3. Design The Nodes

Nodes are the basis of distributed ledger technology (DLT) on which the blockchain depends for efficiency support and security. You need to determine if the nodes will be permissioned, permissionless or hybrid. What are the hardware requirements, and what hosting option is best to host the nodes?

4. Building a blockchain architecture

Blockchains are classified into the mainnet and testnet. The testnet operates exactly like the mainnet and is used to test different features on the blockchain. Once you've selected the features of the blockchain and how it should operate, you cannot change it after you launch the maninet. So in making your own cryptocurrency, ensure your blockchain is fully tested on the testnet and ready before launch.

5. API integration

Application Programming Interfaces (APIs) are essential for better performance and usability. One crucial step in how to launch a cryptocurrency is confirming if your blockchain platform has integrated APIs. Some companies provide API services for blockchains and help drive adoption among users.

6. Interface design

When creating a cryptocurrency, you must focus on providing a good user experience for users. One way to do that is to ensure that the interface design is of top quality. Updating your web and FTP servers and improving the website coding over time keep your interface design of top quality.

7. Cryptocurrency legalization

Once you start your own cryptocurrency, you must get familiar with the laws regulating crypto-related operations. In 2017 and 2028, there were several charges on crypto creators and entrepreneurs who conducted or promoted Initial Coin Offerings (ICOs) and other crypto-related activities without knowing the crypto laws. So, you must be familiar with the regulations regarding securities offerings before launching a new coin or token. More importantly, it's important to hire a good lawyer with proficiency in the tech field to guide you through the process of legalizing your cryptocurrency.

8. ICO promotion

The Initial Coin offering (ICO) or Security Token Offering (STO) is the final stage in creating a coin but the first stage of your marketing plan. This is the first step to increasing awareness and getting users for your cryptocurrency. So you need to partner with social media influencers, industry players, crypto exchanges, and press media for success.

Five Best Cryptocurrencies

There are thousands of coins and tokens in the crypto industry. Let's explore five of the most popular coins.

1. Bitcoin

Bitcoin is the first-ever cryptocurrency, and it's still at the top of the game, with a staggering 44% of the global crypto market share. Bitcoin is the most popular cryptocurrency regarded as a top-rated investment option. Today, it has a market cap of over $557 billion, ranking first amongst other coins.

2. Ether

The closest to Bitcoin in popularity is Ether. Ether is popularly used in creating a new cryptocurrency because of the smart contract integration on its blockchain Ethereum. At the moment, it captures almost 20% of the crypto market with a market capitalization of $238 billion as it keeps growing.

3. Teter (USDT)

Teter is a stable coin whose value is equivalent to the US dollar. It's less susceptible to market volatility and is expected to maintain its one-dollar peg. Right now, Tether (USDT) has a market capitalization of 73 billion dollars and accounts for 5.59% of the entire crypto market.

4. Litecoin (LTC)

As earlier said, you can create a cryptocurrency by forking an existing blockchain. Litecoin was created as a fork of Bitcoin in 2011 to develop a better blockchain. Litecoin operates with a better block generation rate, processes faster transactions, and has over $4 billion in market cap.

5. Binance Coin (BNB)

Binance launched its exchange-based coin, BNB, in 2017 to facilitate trading on its platform. The appeal to using the Binance coin is the significantly low fees users pay when trading with it. As of today, Binance coin, BNB has managed to secure 4% of the entire market with over a $50 billion market cap.

The Cost Of Creation

The cost of cryptocurrency creation is tied to whether you want to build a blockchain for your coin or if you'll choose to build on an existing one. It also depends on the specific objectives of a project and the method you choose for the process. The process of cryptocurrency creation involves spending on certain expenses, including the following:

Stage

Time

Cost

Development

Differs across projects ( can be as little as 15 minutes to as long as six months)

$1,000- $50,000+

ICO Security Audit

1 Month

$3,000+

Documentations and Whitepaper

1-2 weeks

$5,000+ ($500/page)

Promotion

7-30 days

$10,000/week

Coin Placement

7-14 days

$5,000+

How Much Time Will It Take

When you set out to make your own cryptocurrency, the time it takes to launch depends on your chosen method. Automated tools can accelerate the process and get your token ready in under 20 minutes.

The time taken to make changes to a blockchain's code depends on your technical expertise. If you're good at it, you should be able to complete the process in 4 hours, or you could hire professional developers for the job. But if you decide to build from scratch, the project can last for several months before completion as development, audit, and ICOs are time-demanding.

Conclusion

Now that you've learned how to create your own cryptocurrency coin, it's time to get started. Learn about the laws guiding the use of crypto and take a course on blockchain to understand how it works. Finally, the most feasible way to create a cryptocurrency is to build on an existing blockchain. And although thousands of tokens are on the market, yours could be the next!

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The cost of creating a cryptocurrency varies depending on the development method. It costs higher to build a coin on a new blockchain than to create a coin by forking an existing one. The former can cost as much as $50,000, while the latter can cost less than $20,000.
To create your cryptocurrency, decide which consensus and blockchain your coin will operate on. Hire a blockchain development team to design the blockchain’s nodes, architecture, and API integration. Launch your coin through an ICO promotion to create awareness and build a good community.
Regardless of the development method you choose to make your own cryptocurrency, there are certain costs you must pay to launch your coin successfully. Therefore, the best way to lessen costs is to choose a more cost-efficient way to create your coin or token.
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