How a make your own cryptocurrency
So you’ve decided it’s time to immerse yourself in the world of crypto and you’re wondering how to make a cryptocurrency.
There are many reasons to finally find yourself in this spot. You might have been keeping track of where much of the market is heading over the years (hint:it’s way up). Perhaps you’re developing a play-to-earn game and need an in-game token. Or maybe you’ve discovered a massive hole in the fiat currency market (use case) that can only be filled with crypto.
In any case, you’re ready and raring to get developing and create a crypto or token of your very own. And in this article, you’ll learn the steps to do just that.
What is a cryptocurrency?
Otherwise known as crypto, it is any kind of digital currency that uses encryption in the form of cryptography to keep transactions secure and anonymous. It uses a decentralised system to both verify funds transfers and issue new currency units, which means no central authority is able to track or regulate it (such as a bank or government).
This peer-to-peer money transfer uses a digital ledger to record each of the transactions that are made, and users’ digital currency is stored in crypto wallets.
Instead of the digital ledger, which is known as the blockchain, being stored at one location, its information is stored across all users’ computers around the world who are holding the crypto at the time.
Though there are currently over 10,000 different types of crypto coins and tokens available, far and away the most widely-known is Bitcoin. Founded in 2009, its use case was simply to enable global money transfer without the requirement of any intermediaries.
And since its launch when it entered circulation at less than USD$0.01 per coin, it has exploded in value and currently sits at USD$40,931.10 a coin.
Coins vs. tokens: What’s the difference?
Although coins and tokens both fall under the cryptocurrency umbrella, their characteristics are substantially different.
If you’re looking to create something that functions in the same way as fiat currencies except digitally and without the use of a centralised bank or government involvement, you want to go with a coin.
In which case you may consider forking an existing blockchain. This process involves jumping on GitHub and finding the open source code, then modifying it to something that works for you and launching your new coin.
If you want total creative freedom to pursue your unique use case and need lots of flexibility with not just the coin but the blockchain itself, you’ll most likely be looking at creating your own version of both. Which, of course, can be incredibly difficult if you don’t possess a high level of coding ability (though you can always subcontract this work out to the pros!).
When you’re after something that can be used within applications like in-game rewards or something similar and are happy to have your crypto built on a pre-existing blockchain, a token is the best solution.
Although you’re not going to have anywhere near as much freedom or flexibility as you would creating your own blockchain, it’s a much faster, easier and more economical route to take.
Essentially, the one you choose will depend on your end goals and individual project’s requirements.
How to make a cryptocurrency: A step-by-step guide
So now you’re across what it is and the options you have regarding coins and tokens, it’s time to learn how to make a cryptocurrency!
- Determine your use case
Without having clear objectives from the get-go, your project will most likely run into trouble quickly. Avoid this by clearly determining what existing ‘hole’ in the market your crypto is going to patch (aka why you’re launching a coin).
- Choose a consensus mechanism
As the name may have given away, a consensus mechanism is the protocol that decides whether a particular transaction is going to be accepted as legitimate by all of the participating nodes on the network.
You’re able to choose from a number of different consensus mechanisms in order to best achieve the objectives of your coin.
- Pick a blockchain
Depending on the consensus mechanism you’ve chosen, you’ll have a list of existing blockchain options that can be used to ‘house’ your new coin.
The appropriate blockchain for you will depend on the goals of your project as well as your skill levels in coding.
- Design the nodes
If you think of a blockchain as if it were a wall, each of the bricks would be a node. Each of these nodes (devices connected to the internet) helps to support a blockchain through things like transaction processing and data storage.
As such, blockchains are dependent on nodes for everything including security, support and efficiency. You’ll need to make decisions including whether they’ll be on-premise or cloud hosted (or both), their permissions and which base OS they’ll run on.
- Develop the blockchain’s architecture
Through the internal architecture development of the blockchain, you need to consider everything from permissions, asset issuance/re-issuance, address and key formats, key management, parameters, block signatures, hand-shaking, atomic swaps and more.
Before you officially launch your coin, it’s important to remember that when that happens there are certain functionalities of the blockchain and nodes can’t be changed. Avoid heartache by using a testnet to check everything first!
- Sort out APIs
Application Programming Interfaces (APIs) aren’t offered by all platforms, which means the one you’ve chosen doesn’t have any in-built into its code.
Solid API can really make a huge difference in the uptake and popularity of crypto, so if this is the case you can quite easily reach out to third-party API providers to help.
- Design the interface
If the platform ends up being too hard to use, you’re not going to see much success with your new coin. Make sure it’s as easy as possible by designing a simple and straightforward interface for your users as well as using up-to-date web and FTP servers.
- Make it legal
Protect ya neck by doing plenty of research about laws and regulations surrounding crypto and blockchains before you launch your coin. And because of its constantly-changing landscape, stay on top of the latest regulations and laws as they evolve all the time.
- Continue to improve things
Like any other type of business out there, if you launch and leave it to itself to run it’s going to fizzle out and die. It’s important that you’re constantly looking at new ways to improve and innovate if you want to remain relevant in the crypto world.
Bring in the pros for expert crypto and NFT consulting
After you’ve spent time and effort creating your own cryptocurrency or crypto token, you want to make sure as many people know about it and are interested in using it as possible.
That’s where Mooning comes in!
We’re here to help you see the best results possible with your new coin or token, so you can watch the value of it shoot straight to the moon!
Call us today on 1300 818 435 or send us an online enquiry to discover the expert services Mooning is able to offer you.