Due to flexibility, cryptocurrencies have become popular in the last decade. Keep reading to explore all the possible ways to make and start your own cryptocurrency.
What is cryptocurrency?
Cryptocurrency is a class of digital currencies created using cryptography. All transactions made by people are securely verified and stored in a decentralized system. It serves as a medium of exchange through computer network interactions. Unlike fiat currencies issued by centralized authorities, cryptocurrencies are entirely decentralized, meaning they can be circulated and maintained without a central bank or government.
How to create a cryptocurrency coin?
On average, about a hundred cryptocurrencies are created daily. Many cryptocurrencies are created on the precepts of Bitcoin’s blockchain, the pioneering cryptocurrency created in 2009. Since 2009, numerous coins have been made, including Ethereum, Cardano, and Doge.
You can do it too. You don’t need to be a computer guru to create your own coin, although some computer knowledge is required. Let’s consider several options on how to create your own crypto coin:
- Creating your blockchain.
- Modifying an existing blockchain.
- Establishing a coin on an existing blockchain.
- Hiring a blockchain developer.
Let’s consider each of these options in more detail.
#1. Creating your blockchain
You can create a new blockchain that supports native cryptocurrency. It involves writing your own code. The advantage of creating your own blockchain is that it gives you much design freedom.
If you want to create an innovative cryptocurrency, then this is your best option. But a comprehensive technical background is usually required to develop coding skills and a critical understanding of blockchain technology.
Here are the steps you need to follow:
- Choose a consensus mechanism
You will need to choose an operating protocol for your blockchain. The most commonly used ones are proof of work(PoW), as seen in Bitcoin, and proof of stake (PoS), as seen in Cardano. There are a few others. You should choose the consensus mechanism that best fits your interest.
- Design your blockchain
You have to decide the design of your blockchain, whether you are to make it private or public, permissioned or permissionless. It all depends on your objective. Ensure that you understand all the details about your blockchain before launching it. Once your blockchain is up and running, you will not be able to modify numerous settings.
You will have to choose a range of options from the simple ones, like your blockchain’s address format, down to the complex ones, such as enabling transfers between multiple cryptocurrencies without using a third-party intermediary.
- Audit your new blockchain and its code
You must have your newly created blockchain code reviewed by specialized blockchain auditors. The assessment will point out vulnerabilities where they may exist, so you can improve the blockchain and, by extension, your cryptocurrency.
- Verify legal compliance
You should seek legal counseling before running your new cryptocurrency. Legal professionals can confirm that your cryptocurrency complies with your country’s existing crypto laws and regulations.
After completing the above procedure, you can create your cryptocurrency. You will also need to decide how many coins you want to release at the beginning. You can run the total number of coins in one batch or gradually increase the number over time as new blocks are added.
#2. Modify the code of an existing blockchain
You can decide to use the source code of an existing blockchain to create your blockchain and native cryptocurrency. Although, this option still requires some technical knowledge, as you may choose to modify the source code to satisfy your design objectives. After downloading and modifying the source code of an existing blockchain, you still need to have your new chain audited by experts and legal specialists before mining.
#3. Establish a new cryptocurrency on an existing blockchain
You can also make a new cryptocurrency on an existing blockchain without modifying it. Many platforms, such as the Ethereum blockchain, are designed for creating various cryptocurrencies without modifying the blockchain. The mined cryptocurrency will be called a token since it is not native to the blockchain used to make it.
Here are the basic steps to follow when creating your token on an existing blockchain platform:
- Decide the blockchain platform. You can choose from over a hundred blockchains, but the most popular ones are Binance Smart Chain and the Ethereum blockchain.
- Create the token. You can create and customize your token the way you want. The complexity of the customization will determine the amount of technical knowledge and financial resources that will be required. Online tools such as WalletBuilders can simplify the process.
- Mint your new cryptocurrency. The last step is to run your token, where you can decide how to supply it. As discussed above, your token must first pass a technical audit and due diligence.
It is much cheaper and faster to make a token than a coin since tokens are less customized. Your token created on an existing blockchain can benefit from the security provisions of that platform. In addition, a blockchain platform may provide other innovative features for your token, enhancing its value and credibility.
#4. Hire a blockchain developer to create a cryptocurrency for you
You can hire a blockchain development company to help create your own cryptocurrency. It allows for a high degree of customization. Many blockchain-as-a-service (BaaS) companies help to develop and maintain new blockchain networks and cryptocurrencies.
Some BaaS companies create customized blockchains, while others use their existing blockchain infrastructure. Some of the most popular BaaS companies include Microsoft Azure, Amazon Web Services, Blockstream, and ChainZilla.
Pros and cons of making a cryptocurrency
- You can customize the cryptocurrency in any way you want.
- You get the opportunity to grow your knowledge about blockchain technology.
- It is an avenue for you to get extra funds when the value of the cryptocurrency increases.
- Creating a cryptocurrency needs technical knowledge.
- It can be costly and time-consuming.
- It requires constant maintenance for the cryptocurrency to be successful.
What to know before making a cryptocurrency?
Creating a cryptocurrency isn’t just a thing only blockchain developers can do. Anyone can learn how to build a cryptocurrency and do it. However, making a cryptocurrency is the easy part. The challenging part is the maintenance, which involves money, commitments of time, and other resources.
Note! A cryptocurrency will only gain value over time if it is maintained and capable of truly serving the purpose for which it was created.
Can I make my own cryptocurrency?
Yes, you can. You can use any of the four methods described above. You do not need to know how to create a blockchain and successfully launch your own cryptocurrency using specific knowledge. Suppose you are the type with plenty of ideas but do not want to go through technical difficulties. In that case, you can hire a blockchain developer to implement your ideas and customize your cryptocurrency.
How much does it cost to make a cryptocurrency?
The cost can vary depending on how you customize your cryptocurrency. Highly customized coins established on native blockchains are the most expensive to create.
If you are wondering how to make a cryptocurrency for free, then pay attention to specific apps. Launching a standardized token on other blockchains like Ethereum or BSC platforms can be accessed through apps like WalletBuilders.
Is creating a cryptocurrency legal?
Creating a cryptocurrency is generally legal, although some countries have banned the use of cryptocurrency and activities related to it. For example, raising money through virtual cryptocurrencies was banned in China. Also, all cryptocurrency transactions, including mining, have been prohibited.
Even in countries where cryptocurrency is legal, it’s possible to violate existing securities regulations when launching and promoting a new cryptocurrency. Before creating your coin, you must clearly understand the crypto regulations peculiar to your country.