What is cryptocurrency, and how does it work? What is the best way to make a cryptocurrency? What is the best way to create my own cryptocurrency? There must be a lot of questions running through your mind at the moment. Don’t worry; we’ve got you covered. Get enlightened with knowledge about cryptocurrency and how it can benefit your business.
There are a few things you need to know about the future of money before answering the $100 billion question (the total valuation of Bitcoin).
What Is A Cryptocurrency?
Let’s start by going back to basics. Currency – what is it?
A banknote or coin is much more than just a piece of paper. As well as being a unit of account, a currency is a means of exchanging goods and services. It is a universally accepted method for buying and selling goods and services.
In Rice, grains, wool, and even feathers were considered currencies in earlier times when the barter system was in place. This method of payment was then regularized by banks. During that time, coins were made, and banknotes were printed.
Now that we live in a digital age, it seems that coins and banknotes are becoming obsolete. Cryptocurrencies emerged as a new form of currency.
Let’s talk about what cryptocurrency is now.
Similar to a physical currency, it operates on a digital platform and is accepted globally as opposed to physical currencies. Cryptocurrencies are not bound by a single centralized platform.
Coins are the only thing cryptocurrency has instead of banknotes. In cryptocurrencies, there is also a term called a token. The difference between a token and a coin is often misunderstood.
Also read: Smart Contracts and Blockchain: A Powerful Combination for Business Applications
Exactly what is the difference between a Token and a Coin in cryptocurrency?
There are three main differences:
- Tokens are based on existing blockchains, while coins are part of a single blockchain.
- Coins can be used anywhere, while tokens are specific to a specific industry or community.
- A coin can buy a token, but a token cannot buy a coin.
- As an example, let’s use a real-life scenario. Starbucks rewards frequent customers who spend a lot of money there with loyalty points. A drink can be redeemed with these points. An establishment (in this case, Starbucks) offers loyalty points as a token of loyalty.
- It is now possible to buy loyalty points for money, which in turn gives you free coffee. Money (in this case, a real-life coin or banknote) represents the coin.
Loyalty points can be bought with coins, but they cannot be converted to real money. A crypto coin can be used to purchase a business’s token, but a token cannot be used to purchase a crypto coin.
Also, read: Unlocking the Potential of Blockchain with Ethereum Development
Starting a New Cryptocurrency: Is It Right for Your Business?
You now have a fairly good understanding of what cryptocurrency is and how it works. Do you really need cryptocurrency for your business? Taking a look at these questions will give you a clearer picture:
- Is your business going online?
- Are digital payments more important to your revenue than hard cash?
- Is an online payment option going to increase your user base?
- Is your business going to last more than a couple of years?
Okay, that was a rhetorical question. A cryptocurrency integration is necessary for your business if all these questions are answered “yes”.
Pros and Cons of Making a Cryptocurrency
Pros
- The cryptocurrency can be customized in any way you want
- A chance to learn more about blockchain technology
- Cryptocurrency’s Potential for Growth
Cons
- Technical knowledge is generally required
- Costly and time-consuming
- In order for the cryptocurrency to be successful, it requires ongoing maintenance
Also read: How Much Does it Really Cost to Create an Altcoin? Find Out Here!
What to Know Before Making a Cryptocurrency
Cryptocurrencies can be created by anyone, even for fun. Successfully launching a cryptocurrency requires time, money, and other resources, as well as advanced technical knowledge. The process of creating a cryptocurrency is straightforward. The challenge is usually in maintaining and growing it over time.
Creating your own token is probably not a bad idea if you are just curious about crypto. Just make sure to avoid any activities that might be considered as an initial coin offering (ICO) by the U.S. Securities and Exchange Commission, as you don’t want to accidentally violate any federal securities laws.
You won’t be the only person or organization experimenting with making your own cryptocurrency with so many coins and tokens being released.
Can I make my cryptocurrency?
Cryptocurrencies can be made by anyone. Coins and tokens are usually created by computer programmers, but you can also hire a blockchain developer to do it for you. Technical expertise is not required to launch a token on an existing blockchain platform such as Ethereum.
How much does it cost to make a cryptocurrency?
The cost of creating a cryptocurrency varies greatly depending on how much customization you choose. With apps like WalletBuilders, it is possible to launch a standardized token on the Ethereum platform for free, while highly customized coins on native blockchains cost the most.
Is creating a cryptocurrency legal?
Cryptocurrencies are generally legal to create, but some countries and jurisdictions have banned them partially or completely. A ban on cryptocurrency transactions has been enacted in China since 2017, for example, and raising money through virtual currencies is illegal.
Launching and promoting a new cryptocurrency can violate existing securities regulations, even where it’s legal.
Also Read: How to Build an Ethereum Smart Contract in 7 Easy Steps
Benefits of building your Own Cryptocurrency:
- Eliminate Fraud Risk
- Transaction Anonymity
- Lower Operational Costs
- Immediate Transactions
- Access To New Customer base
- Security For Funds
How To Make A Cryptocurrency?
In addition to advanced technical knowledge and commitments of time, money, and other resources, anyone can create a cryptocurrency.
You can either create your own blockchain, modify an existing blockchain, establish a coin on an existing blockchain, or hire a blockchain developer.
The process of creating a cryptocurrency is simple. The challenge is usually in maintaining and growing it over time.
You’re now ready to start creating your own cryptocurrency. Here is a step-by-step guide to creating and launching your own cryptocurrency, without wasting any time.
The first step. Decide on a consensus mechanism.
A consensus mechanism is a protocol that considers a particular transaction legitimate and adds it to the block.
The second step. Choose a blockchain platform.
You should choose your blockchain platform based on the consensus mechanism you have chosen for your business.
The third step. Node Design
Nodes should be designed based on the functionality and workings of your blockchain. Is the permission public or private, for example? Does the hosting take place in the cloud or on-premises? For the execution, what are the required hardware details?
The fourth step. Establish the internal architecture of the blockchain
Make sure you understand all the aspects before launching a blockchain, as you cannot change several parameters after it is launched. Whether your blockchain will follow an address format or offer crypto-to-crypto exchanges without a third-party intermediary is up to you.
The fifth step. API integration
You should make sure your platform has pre-built APIs since some platforms don’t. No need to worry, there are several 3rd party blockchain apis providers like ChromaWay, Gem, Colu, Bitcore, BlockCypher, and Tierion.
The sixth step is to design the interface
Cryptocurrencies are worthless if their interfaces aren’t user-friendly. Ensure that the web, FTP, and external databases are of the most recent versions, as well as the front-end and back-end programming are done with future upgrades in mind.
The seventh step. Legalize your cryptocurrency
Ensure that your cryptocurrency complies with upcoming international cryptocurrency regulations. So you don’t have to worry about unexpected surprises ruining your efforts to create a new cryptocurrency.
Also read: How much does it cost to hire Ethereum Developers from India?
Top Blockchain Platforms of The World:
- Ethereum (Market Leader With 82.70% Shareholding)
- Waves (WAVES)
- Hyperledger Fabric
- NEM
- IBM blockchain
- Nxt (NXT)
- HydraChain
- BlockStarter
- BigChainDB
- EOS
- Quorum
- IOTA
- CoinList
- MultiChain
- Openchain
- Chain Core
The Best Cryptocurrencies That Made It Big: Success Stories
- Bitcoin
Since Bitcoin has become synonymous with cryptocurrency, many people now refer to it as Bitcoin instead of cryptocurrency.
- Litecoin
Litecoin is often referred to as the silver to Bitcoin’s gold. Like Bitcoin, it has a faster block generation rate and a faster confirmation rate for transactions.
- Ethereum
With Ethereum, smart contracts are decentralized without any downtime, third-party interference, or fraud.
Also read: How Altcoin Development is Driving Innovation in Cryptocurrency
Final Word
There is a very bright future for cryptocurrency in the glorious institution of currencies. Starting your own cryptocurrency in the present is the first step to running a successful and growing business in the future.
In order to create your own cryptocurrency like Bitcoin, you need an experienced technology partner.