How To Make Your Own Cryptocurrency – A Complete Guide
How To Make Your Own Cryptocurrency:
The term Cryptocurrency is such a term that no one can avoid these days. Different financial authorities, blogs, and even news are observing it very much because of its increasing hype and elevating trend as well. The entire world is changing in front of our eyes and we have to admit that it has been going from hard cash toward many types of digital currencies.
Now you are here with this fascinating idea or want to launch a new Cryptocurrency of your own, well if it is so then it could be a very much great business approach. But the question now is what exactly you have to do? No doubt the internet is full of such information but it is scattered and is not understandable as well.
After you have completed the reading of this article you will come to know how a token differs from a coin, how to make your own Cryptocurrency, and whether you need it or not in your business.
The Real Difference Between Coin and Token
Before we get started, it is very much necessary to understand the major differences between a coin and a token. Though they both fall under the category of a single term “Cryptocurrency”, but these two are different things.
A coin like Litecoin or Bitcoin exists in its own chain but a token is basically an attention-seeking thing that functions on the heights of developed blockchain technology and its infrastructure like Ethereum.
In Cryptocurrency, users hope to spend their coins in shops and stores, but it is just like fiat currencies. Cryptocurrencies do not have any centralized banks as well. But on the other hand, tokens have some utility value in some specific kind of contract as well just like Basic Attention Tokens. You can even get tickets or loyalty points by using these tokens as they have some sort of digital value or contract as well.
Techniques Used To Create Cryptocurrency
Here you will see three ways that could be used to create your own Cryptocurrency but keep in mind that none of them is easy and quick. How these three work is described as below:
1. Creating a New Blockchain
You will require a lot of coding skills if you are creating a blockchain from scratch. It is also stated as the most difficult method of creating your own Cryptocurrency. You can see many online courses that might help you walk through this stage but pre-existing knowledge plays a very important role as well.
In this technique even if you know everything you have to observe substantial skills and have to create an entirely new blockchain in order to create your own Cryptocurrency.
2. Fork An Already Existing Blockchain
If you plan to fork an already existing blockchain then you would find it much quicker and easier as compared to creating a new one from the beginning. In this method, you have to get an open Source code from GitHub. Then you have to change it and create a new name for your coin before launching it to the market.
The best example of this method is that from a well-known Cryptocurrency “Bitcoin ” the developers of Litecoin created their own Cryptocurrency. You can also search that the developers had forked many other Cryptocurrencies from it just like Garlicoin and Litecoin Cast etc. But it is not as easy because the entire process also requires a complete understanding of the existing code.
3. Using An Existing Platform
It is the third method or technique that is for most people who are unfamiliar with coding. They can make a new Cryptocurrency or token on such platforms that are already in existence like Ethereum. You can observe that many projects make their token on Ethereum Network by taking ERC-20 standards in regard.
Steps Involved In Making Your Own Cryptocurrency
After taking all the above-mentioned things in regard you can now step ahead for making your Cryptocurrency. You will acknowledge that some of the steps are less relevant when you are paying to a third party but one should know about all the facts and should have the complete information for the creation of an entirely new Coin or Cryptocurrency.
1. Make a Decision On Consensus Machine
This is a protocol that tells you about the transaction and whether or not the network is capable of considering your specific transaction. For a complete and appropriate go-through, all the nodes have to affirm the transaction details.
This entire process is named “achieving consensus”. For a better understanding of the working of nodes, you have to get a perfect mechanism as well.
Proof-of-work was the first consensus machine used by Bitcoin. Another famous consensus machine is Proof-of-Stake but now you can also see many other consensus machines in the market.
2. Select a Blockchain
This step takes us back to the previously discussed methods. It is a crucial step in which blockchain environment the coin or token has to reside. Your project goals. Technical skills and comfort level will definitely decide this step.
3. Creating Nodes
You might note that the backbone of any Distributed Ledger Technology (DLT) is the nodes. How your nodes will function would be the first priority when you are taking the initiative of developing a new Cryptocurrency.
4. Build The Architecture Of Your Blockchain
Developers should be completely ensured of the functionality of their blockchain and the designs of their nodes as well before launching their Cryptocurrency. When the main net is launched then you can not change many things and there is no way back as well. So you should practice testing the things on the test net before launching your Cryptocurrency.
5. Integrate APIs
You will not see Application Programming Interfaces (APIs) on all the platforms. Make sure that newly created Cryptocurrency comes up with APIs that will help in making it very much outstanding and it will increase its adoption as well. In this step, you can take help from many of the third-party blockchain API providers as well.
6. Designing The Interface
This little point in the making of Cryptocurrency is a little tricky and people find it difficult to execute. Your web server and File Transfer Protocol (FTP) should always be updated. You have to do the programming on both the front and backends by considering all the future developing upgrades in mind as well.
7. Making Your Cryptocurrency Legal
If you will not consider this step then there might be a number of chances of failing your digital currency. Cryptocurrency is just like a legal grey area nowadays.
You may realize that the creation of new coins may lead to criminal acts or other changes that may risk your integrity as well. In this step, you might consider hiring a lawyer who has much expertise in this field and can do all the legal work done for you as well.
Here in this scholarly article, we have discussed the simple methods that you can use to create your own Cryptocurrency. But it is not an easy task as it requires a lot of expertise and skills as well. But this is a complete guide for beginners who want to start up a new business or want to introduce a new coin or token in the field of Cryptocurrency.
We hope that after reading this piece of writing now you have enough know-how about the Cryptocurrency and creation of your own Cryptocurrency as well. Now you can easily understand all the processes as well.