Do you want to create a cryptocurrency? Then you’ve come to the right place!
Ethereum, Ripple, Polkadot, and many, many more… There are thousands of cryptocurrencies out there, and quite a lot of them have made their creators exceptionally rich. And that’s not all: their developers also got to realize their craziest ideas. Crypto and blockchain make it possible to design and launch projects that have the potential to change the world without requiring that much of an initial investment. Business owners can also choose to support their project with a token that will provide them with the additional security of funds, customer loyalty, expand their customer base, and more.
Today, we will tell you everything you need to know about how to make a cryptocurrency. Let’s dive in!
What Is a Cryptocurrency?
Before we can learn how to make a cryptocurrency, we should first establish what it actually is.
Basic Definition
First, let’s define what a currency is. To put it simply, it is a unit of storage and a means of exchange.
Cryptocurrency fulfills the same purpose – but unlike traditional currencies, it is digital and doesn’t belong to a single country. It is not controlled by a centralized entity like a government or a bank.
Advanced Description
Cryptocurrency is a digital currency that is secured by cryptography. Cryptocurrencies operate on blockchains – an open distributed ledger that records encoded transactions. The decentralized nature of cryptocurrencies allows them to not be controlled by governments and other centralized authorities.
The Difference between a Coin and a Token
In order to create a cryptocurrency, it is important to understand the difference between a token and a coin. Many people use these two words interchangeably, but, in fact, they have different meanings.
Coins are the cryptocurrencies most people think of when they hear the word: Bitcoin, Ethereum, Dogecoin, etc… These are digital currencies that operate on their own blockchain, meaning they have their own transaction ledger. Coins are used as a transfer of value.
Tokens, on the other hand, are built and operate on top of existing blockchains and don’t have their own individual transaction ledgers. Each token usually represents a contract of sorts – this contract can be made for almost everything, from a service to a physical object or loyalty points. Additionally, unlike coins, tokens usually cannot be used everywhere: they are typically limited to a specific community or industry. A very popular subset of tokens is called “ERC-20” – this Ethereum-based token is now considered to be a technical standard. This token type provides a list of rules that all Ethereum-based tokens must follow and is used for all smart contracts on the Ethereum blockchain for token implementation.
Can I Make My Own Blockchain?
You have a few options if you want to create a cryptocurrency.
It is possible to create your own blockchain… but it’s very, very hard. This is why most people nowadays create tokens instead of coins. That said, creating your own blockchain isn’t the only option you have: you can instead fork an existing one.
Alternatively, you can also create a cryptocurrency on one of the existing blockchains, like Ethereum, one of the best platforms for decentralized applications (dApps) and smart contracts deployment.
Benefits of Creating Your Own Cryptocurrency
There are several advantages you can gain if you create a cryptocurrency. Firstly, you will be able to make a profit. Secondly, making a cryptocurrency is akin to starting your own business: you will be able to develop a project that realizes your wildest dreams, and it won’t require as much investment as a regular small business does.
If you already own a business, creating your own cryptocurrency to support it can provide a whole bunch of tangible benefits, such as:
- Access to new features
- Lower operating costs
- Immediate, secure, and anonymous transactions
- Access to a new customer base
… and more!
How Much Does It Cost to Create Your Own Cryptocurrency?
Well, the answer is… it depends. Depends on how many features you want, whether you want a coin or a token, whether you want to do initial coin offerings (ICOs), include marketing, other adjacent costs, etc.
You can hire a developer or a whole team to help you, or you can research and do everything needed to create a cryptocurrency on your own. Don’t forget that besides the development itself, you will also need to make a website, likely organize an initial token/coin offering, work together with existing crypto wallets or create your own to give users a place to hold your currency, list your coin on cryptocurrency exchanges, and so on. The costs can pile up quite quickly, so you should thoroughly research everything you will have to pay for in advance and be sure that you can handle it – nobody wants to create a cryptocurrency that will be called a shitcoin and will become obsolete before even being issued.
How Hard Is It to Make Your Own Cryptocurrency and How Long Does It Take to Create a Cryptocurrency?
Once again, it depends. If you choose to hire a whole team of professionals to help you, it won’t be that hard to create a cryptocurrency. However, if you choose to do it yourself, you will have to do a lot of research and learning. Unless you are an expert in developing, the legal field, marketing, writing (you will need to create a white paper and other documentation, after all) and more all at once, you will likely have to study to be able to create your own cryptocurrency.
The time it takes to create a cryptocurrency is hard to define. It can be done in anywhere from a few weeks to years – it all depends on how you go about it and the difficulty of the project.
Is Creating a Cryptocurrency Legal?
Creating a cryptocurrency is fully legal. Although crypto originated as a transfer of value used mostly by darknet users, it has since evolved into a fully legal venture.
How to Make a Cryptocurrency?
So, you decided to create a cryptocurrency. What’s next?
Well, first things first: you need to decide what goals you have. Do you just want to get rich, or do you want to help the world in some way? Do you have a brilliant idea that you can’t wait to realize?
Next, you can try to think about the more technical side of things: whether you want your cryptocurrency to be eco-friendly, whether mining it will be possible or not, will it have smart contracts functionality, and so on.
If you are planning to create a cryptocurrency, you’ll have to start with the basics first: the underlying blockchain technology. You will either need to choose a hashing algorithm and create a new blockchain or fork an existing one (like Bitcoin or Ethereum) and configure it to your liking. Alternatively, you can also create a token on an existing blockchain that suits your needs.
Step 1. Choose a consensus mechanism
A consensus mechanism is a protocol that verifies transactions before adding them to a blockchain. The two main types of consensus mechanisms are proof-of-work (PoW) and proof- of-stake (PoS). The former is used by most popular cryptocurrencies like Bitcoin or Litecoin. Just as its name suggests, the proof-of-work hashing algorithm confirms transactions when the miner proves they’ve done enough “work” to validate the transaction – so this algorithm is quite resource-demanding.
Proof-of-stake was developed as low-cost, low-energy consuming alternating to the proof-of-work algorithm. It requires miners to hold large amounts of the crypto they’re mining, promoting saving crypto instead of spending it.
These two can be combined, and there are other consensus algorithms out there, as proof-of-capacity (PoC). But if this is your first time creating your own cryptocurrency, and you’re not an expert in the field of blockchain technology, yet we would recommend just choosing between PoW and PoS.
Build your own blockchain—or fork an existing one
If you have some coding knowledge and experience but not a lot of time and you’re not fully confident in your ability to create your own blockchain, you can fork an existing one.
Alternatively, you can also create a cryptocurrency on an existing blockchain. If you want to create a cryptocurrency to support another project of yours, then making a token can be a good option. It’s easier and less resource-intensive than creating a coin.
How to create a Bitcoin fork
Forks are changes in an existing crypto network protocol. Since many cryptocurrencies are open-source, their code is readily available, and thus they can be forked quite easily – provided you know how to code, of course.
Here’s how you can fork blockchains:
Option 1: Use a fork coin generator
This is a great way to create a cryptocurrency and make a blockchain fork for people who don’t have much coding experience. For example, you can use an automated generator like ForkGen to fork the Bitcoin blockchain with your own chosen parameters and create a new cryptocurrency.
Option 2: DIY
If you have sufficient coding experience and feel confident in your abilities, you can always create a new crypto fork yourself.
- Research various blockchains and decide which one you want to fork.
- Get access to that blockchain’s source code (it is often available on GitHub).
- Reconfigure the code to your liking.
- Check your source code and publish it on GitHub.
There are quite a few crypto fork success stories: for example, Bitcoin Cash, Bitcoin Gold, and Litecoin are all forks of Bitcoin.
What is the difference between hard and soft forks?
There are two types of forks: hard and soft.
Soft forks, just like the name suggests, are the less demanding of the two. A majority of the nodes have to update their software, but non-updated nodes can still operate alongside them.
Hard forks, on the other hand, require at least 90% of all nodes to be updated – and non-updated nodes will no longer be accepted by the system.
The best blockchain platforms
Coding isn’t for you? No worries, you can easily create a new cryptocurrency without having to bother with forks and new blockchains!
If you do decide to create a token instead of a coin, then you’ll need to choose what blockchain platform you will build your cryptocurrency on. Here are the top blockchain platforms in the world, in no particular order:
- Ethereum
- WAVES
- NEM
- IOTA
- Quorum
- EOS
Step 2. Design the nodes
Blockchain nodes help to validate transactions and store a complete copy of the distributed ledger. Design your nodes in accordance with the way you want your blockchain to work: choose whether the permissions will be public or private, whether you want cloud hosting or not, what will be the hardware requirements, and so on.
Step 3. Establish the blockchain’s internal architecture
Next, make sure that you’re confident you are satisfied with all the parameters and features that you won’t be able to change once your cryptocurrency is launched, such as what type of address you will be using.
Step 4. Integrate APIs
Some blockchain platforms offer pre-built APIs, but some don’t. If you decide to launch your own cryptocurrency on an existing platform, make sure to check whether they have the APIs you need.
If you’re creating your own blockchain, research which APIs you will need to integrate and try to do it as soon as possible.
Step 5. Design the interface
If you want to create a cryptocurrency that will become successful, make sure the front-end part of your project is all top-notch. The website, the databases, and so on are the things that your clients and users will be interacting with, so they need to be presentable and suit your project. Create a social media presence and carefully curate it, write a white paper – design your crypto’s interface in a way that will attract users to it, instead of scaring them away.
Since this step is all about how users will be interacting with your new cryptocurrency, it also includes listing your crypto on cryptocurrency exchanges and making sure holders have a crypto wallet they can store your coin/token in. Participate in crypto events and start making friends in the cryptocurrency industry: all that networking will pay off when you make your cryptocurrency.
Step 6. Make your cryptocurrency legal
If you don’t want your cryptocurrency to become obsolete and be called a “shitcoin”, then make sure it abides by all the applicable laws and regulations. Before you create a cryptocurrency, research crypto legislation in your country of residence and hire a lawyer if you’re not sure you can handle it all on your own. This is one of the most important steps of launching your own cryptocurrency.
Best Cryptocurrencies that Made It Big: Success Stories
Here are some cryptocurrencies that have inspired many other people to create their own. If you want to see other crypto success stories, you can find them on our blog!
Bitcoin
Bitcoin is so popular that it has pretty much become synonymous with the word “cryptocurrency”. Launched back in 2009 by an individual (or a group of individuals) called “Satoshi Nakamoto”, Bitcoin revolutionized the world. The coin’s price went up to over $60k at the beginning of 2021 and may rise even higher in the future.
At one point Bitcoin, a cryptocurrency was even one of the top 10 assets in the world by market capitalization.
Bitcoin made many people, including, most likely, its anonymous creator, millionaires, and inspired countless crypto enthusiasts to create their own cryptocurrencies and blockchain projects.
Read also: Should I Buy Bitcoin?
Litecoin
Litecoin often gets called the silver to Bitcoin’s gold. Although the two coins are really similar in many ways, they have quite a few differences: mainly, Litecoin has much faster block generation and transaction confirmation times.
Litecoin is one of the biggest cryptocurrencies in the world. As a fork of Bitcoin, it shows that you don’t necessarily have to create your own blockchain to make a successful cryptocurrency.
Ethereum
Ethereum is the world’s second-largest cryptocurrency. It made its creator, Vitalik Buterin, one of the youngest self-made millionaires in the world.
Moreover, Ethereum is currently the biggest platform for smart contract and token development and has inspired many people to create their own cryptocurrency. Its smart contract functionality is not the only thing that made it popular, though: above all, it is an excellent cryptocurrency.
Read also: Bitcoin vs. Ethereum: an Overview
Final Thoughts
Creating your own cryptocurrency isn’t a walk in the park – but all the effort and resources you put into it can pay off spectacularly. As long as you have a great idea and execute it well, the cryptocurrency you create can bring you both tangible and intangible benefits.
Launching a new cryptocurrency can make you rich directly, or it can help you to earn money by strengthening your existing business. If you want to have a successful cryptocurrency or run a profitable blockchain business in the future, now is the time to start working on it. The crypto industry still has a lot of room to grow!
