How to Create a Cryptocurrency
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With the development of blockchain technology, more and more people are interested in how to create a cryptocurrency. Actually, there are some ways to do this.
Cryptocurrency is a new phenomenon in our world, and though it is more than 11 years old, it is still being misrepresented by many. While some believe it to be a new form of money, others consider it just a buzzword. However, there is so much more to the story.
Cryptocurrency is a decentralized digital currency that uses encryption techniques to regulate the generation of currency units and to verify the transfer of funds. Anonymity, decentralization, and security are among its main features. Cryptocurrency is not regulated or tracked by any centralized authority, government, or bank.
Today, more than 1,600 types of cryptocurrencies, including the most popular ones like Bitcoin, Ripple, and Ethereum, are available and the number is still growing.
Difference Between Coins and Tokens
There are two large subcategories cryptocurrencies are divided into – coins and tokens. Although they are both cryptocurrencies, there is a difference between them. If you understand their main concepts it will help you make your own cryptocurrency for specific business needs.
A coin operates on its own blockchain where all transactions occur like Bitcoin, Ethereum, Neo, and Emercoin, which operate on a different blockchain. If you wish to make your own coins, firstly you need to create your own blockchain.
A token works on top of an existing blockchain infrastructure, which is used to verify transactions and make them secure. Tokens are mostly used like smart contracts, which represent everything from physical objects to digital services. Everyone can use Ethereum or Neo as the underlying technology to start a new cryptocurrency. The initial use for tokens is a security token offering (STO), it helps projects and startups fund operations through a crowdsale. That is why companies start considering the question of how to create a cryptocurrency in the first place.
How to Create a Cryptocurrency: Technical Matters
You can make cryptocurrency by creating a totally new blockchain with a coin or by forking an existing one and creating a token. There are many online tutorials about how to create a cryptocurrency, although all of them require at least basic coding skills and an in-depth understanding of blockchain.
Ways to Create a Cryptocurrency
Creating a coin
This is not a good option if you are looking for an easy and quick way to create your own cryptocurrency free of charge. You should be an experienced professional in decentralized technologies or have a technological expert.
To create a coin it can take only 5 minutes. You just need to copy the code of Bitcoin, add a new variable, or even change the value of something, and you have your blockchain and coin. Besides, you should understand the code and how to change it and this requires extensive coding skills.
Another thing is to maintain, support, and promote the coin because you have to create the whole logic of blockchain to launch your coin. If you hire a team of professionals to cope with the task, it would save you more time, but you would have to pay a development team. If you have money for this, go for it.
Creating a token
This is an easier way to become a currency creator. On the one hand, you have complete control over the blockchain which is great, but on the other hand, this means increased development time, significant spending, and much more.
Fork cryptocurrency is created on top of an existing blockchain by utilizing the trust, popularity, and consensus mechanism of the underlying technology. If you build a token on top of a strong blockchain, like Ethereum, it means that your token runs on a secure network which is protected from fraudulent attacks. The creation of token is not so costly as far as money and time are concerned because you utilize the existing decentralized architecture and implemented consensus mechanisms.
This table shows the advantages and disadvantages of building coins or tokens:
Popular Solutions for Making a Cryptocurrency
To create a token there are a few blockchains that provide the means for it. The most popular tools are Ethereum, NEO, and EOS, they are also relatively easy to use.
This table shows the main aspects of creating a new cryptocurrency with Ethereum, NEO, and EOS.
On the one hand, the majority of blockchains that can be used as an underlying network for a new token have broad communities and detailed documentation. But, on the other hand, you need to be an expert in programming to understand it all and use the knowledge for further development.
Technical issues are the hardest part of creating your own cryptocurrency. You can easily find tutorials on how to create your own cryptocurrency in 15 minutes or how to make a cryptocurrency without coding, but in reality, creating cryptocurrency is not easy. You need to have extensive experience in blockchain programming to accomplish the goal. Only qualified specialists have the knowledge and experience to walk you through this challenging task.