Have you ever wondered how to create your own cryptocurrency? It seems like yesterday that bitcoin became a common topic in social media and news reports. Perhaps you got interested after seeing the people making a fortune from their investments. Maybe you’re one of the few who sees how this digital currency is reshaping our world.
Whatever your reason is, you can start a new cryptocurrency, but it will take a lot of time, skill, money, and effort. If you’re willing to give all these, then you may be on your way to your first blockchain project. Fortunately, you came across this article because we’re about to go through everything you need for cryptocurrency development!
We’ll start with the first thing you must figure out before learning how to create your own cryptocurrency. Then, we’ll show you each step you must take to build your new digital asset. Later, you’ll see that you don’t even have to start from scratch or do it yourself. If you’re set on being hands-on, we’ll show you the skills you need later.
Table of Contents
Start with the “why”
Look back to what a cryptocurrency is. It’s a digital currency that runs on a decentralized network called a blockchain. Instead of a central server, individual nodes operate it.
Those nodes are computers owned by regular people, and they confirm transactions on the network to earn crypto in return. Without that crypto, most people wouldn’t want to run nodes.
The cryptocurrency is just part of a greater project. For example, bitcoin is just part of the new financial system Satoshi Nakamoto wanted, bitcoin’s mysterious founder.
Similarly, you must know your crypto’s purpose. It’s not just because building one will be long and difficult, but rather, it’s because that goal will determine how your crypto will function.
What’s more, you must determine its tokenomics, the economics that will govern your cryptocurrency. It will involve factors like the total supply and initial pricing.
More importantly, you must see if your country will allow your project. Otherwise, you may face serious penalties for it. Again, know and follow your crypto laws.
Steps on how to create your own cryptocurrency
Have you noticed why people use coins or tokens when referring to cryptos? Why can’t we just use one of them instead? Well, that’s because they’re not the same.
Coins are cryptos that have a blockchain of their own. On the other hand, tokens are built on other blockchains. We’ll show you how to create a coin first:
- Pick a consensus mechanism
- Design its internal architecture
- Start blockchain development
- Audit your crypto and confirm the legal stuff
- Craft your white paper
- Mint your cryptocurrency
Read more: How To Invest To Cryptocurrencies
#1. Pick a consensus mechanism
After you’ve figured out your crypto’s purpose, figure out the consensus mechanism you’ll use. This refers to the way its users will confirm transactions on the network.
If you have a cryptocurrency like bitcoin, you may need a proof-of-work model, which has miners running nodes to earn more bitcoin.
On the other hand, you might need proof-of-stake to let more people use your network. Instead of miners, stakeholders leave funds to help run the network and make more money later.
#2. Design its internal architecture.
This step involves figuring out how your blockchain will work. You have four options: public, private, consortium, and hybrid. Read below for more details:
- Public – These blockchain platforms allow anyone to join, including bitcoin, Litecoin, and Dogecoin.
- Private – These are the opposite of public networks because they limit access to certain partners. Examples include Hyperledger and Ripple.
- Consortium – A group of organizations manages this type of network.
- Hybrid – This mixes the singular control of private blockchains with the functions of public blockchains.
#3. Start blockchain development
Creating your own blockchain is no easy feat, especially if you’re a beginner. As you’ve noticed, we’ve covered so many complicated topics, but we’re just giving you the basics!
This is why you might need to form a development team to help you—having a lot of brains working on your project can reduce the chances for error.
You and your team might want to create a testnet for your project. It’s a separate network where you’ll experiment with your ideas before putting them in the main network.
#4. Audit your crypto and confirm the legal stuff
Many of the earlier cryptos like bitcoin had open source codes, meaning anyone could create new crypto with those. Sadly, people used it to scam people.
They promote their crypto, let people invest, and then sell all the coins in one go. This is also known as a rug pull, and trust in new coins went down.
This is why you must get an audit company to prove your project is trustworthy. Click here for a list of auditing companies.
Next, you’ll have to confirm your project follows the law. Getting an audit isn’t enough, and you will have to hire legal services for this.
#5. Craft your white paper
Stock investors read earnings reports and other files to see if investing in a company is a good idea. On the other hand, crypto investors check the white paper.
It’s the document that details how your cryptocurrency works. As you can imagine, these take multiple pages. Yet, it’s a must-have for any crypto project.
A white paper shows that your project is serious. After all, people would want to know where they will put their money. Also, it assures investors that they will profit from your crypto.
#6. Mint your cryptocurrency
It’s time to mint your crypto after you’re done with the previous steps! This just means you will launch it for public use, and it depends on how that release will work, though.
Some cryptocurrencies have a fixed supply, so smart contracts often mint them in one go. On the other hand, coins like bitcoin do it bit by bit because miners have to work first.
These are the steps on how to create your own cryptocurrency. Making a new coin takes a long time and a lot of effort, so you might want to make a token instead.
Other ways to create a cryptocurrency
As we said, a token is built on an existing blockchain. Nowadays, it’s easy because you can pay companies to do this for you. In other words, you save time, effort, and money.
The most common platforms for tokens are the Ethereum blockchain and the Binance Smart Chain. These have been for a long time, so you can rest assured of their safety.
Tokens have downsides, too, such as relying too much on the platform. If that breaks down, your cryptocurrency goes down with it. Also, its price will move with the host crypto.
Let’s use the NFT game called Axie Infinity that uses SLP tokens. It lets you buy Axie pets using Ethers, the native crypto of the Ethereum network. What if Ethers go down in value?
If that happens, the Axie pets will become more affordable, so we may see more people buying them. The NFT game gets more users, and its SLP token may rise in value.
What skills do I need to create my own cryptocurrency?
You now know how to create your own cryptocurrency, but using what you’ve learned in real life is another thing. You will need to learn the following skills:
- Programming languages – You must know how to code. Start with C++, and then choose another language like Java, Simplicity, or Python.
- Cryptography – This refers to the skills you need to secure your crypto project.
- Cryptonomics – This topic refers to the societal factors that could affect your crypto. It will work in the real world, outside the digital.
Aside from helping you make cryptos, these skills can help you land a blockchain job, such as a blockchain developer. Thankfully, you have many ways to learn blockchain technology.
The internet has so many free and paid resources about it. On the other hand, some schools provide classes about the topic. Read all you can about them before trying.
Remember what we said about rolling out your crypto bit by bit? That’s because you will need to have miners and nodes. In other words, you have to encourage people to join your network.
Take bitcoin as an example. It wouldn’t be the number one crypto right now without the miners. This means you will need to learn some marketing too. Here are the steps you need to take:
- Form a team – Build a separate team that can promote your cryptocurrency. Your marketing staff should have some idea of how it works, though.
- Launch a massive marketing move – You will be competing with thousands, so you must do something big to catch attention. For example, you may get influencers to give a shoutout or be a guest on popular podcasts.
- Know your target audience – It’s hard to know your real target audience before launching your crypto. After release, see the types of people who respond to it.
- Have a homepage – Every crypto has a website, so you should also inform people about your project.
- Be an expert in the field – Publish blogs that share crypto info so people see you as an authority in the industry. If they think your project is legit, then they’re likely to invest.
- Communicate with users – You must have multiple social media channels where people can comment about your project. Then, read what they said and answer questions they may have.
Were you expecting the steps to be this hard? No matter what, this is how to create your own cryptocurrency. You will need to have tech and marketing skills for this.
That seems too much time and effort. There’s no way you can learn all these skills just by yourself. Fortunately, a company can promote your cryptocurrency for you.
LeadAdvisors is a digital marketing agency that can handle all your marketing needs, from social media marketing to lead generation. Click here to learn more.