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Beginners Guide: How to Create a Cryptocurrency

Author: Catherine Lysenko
20 November 2020, 14:53
Votes: 1

The world of digital currency is both something complicated that scares and unknown that fascinates people and makes them want to explore it. Everyday news on the cryptocurrency industry is full of mentions about the launch of new projects. This becomes the main impetus for crypto users not only to invest in these “finances of the future” but also to think about the creation of their own digital money.

Beginners Guide: How to Create a Cryptocurrency

It may sound like something fantastic and impossible, but the things are different indeed. With the technical progress and revolution in many IT sectors, as well as access to the best knowledge bases of the world, people have begun to research those topics that are out of their professional scope.

Cryptocurrency is one of such topics as it draws the interest of experts and newcomers. Some of them have only one question: if they have created cryptocurrency, why won’t I be able to do this? If you have the same question and want to start your way as a crypto developer, this article is undoubtedly for you.

Essential information about cryptocurrency

First of all, let’s define what cryptocurrency is to understand its essence better. So, cryptocurrency is an independent virtual currency that operates and develops in its separate ecosystem. It means that such cash doesn’t depend on the global financial system or banks.

From a technical point of view, this digital currency is based on blockchain technology. Crypto cash is organized as numerous blocks that play the role of data storage. In other words, they include data about all transactions. What is more important, if one block is changed, other succeeding blocks will undergo changes as well. 

The first cryptocurrency project was introduced to the world eleven years ago. As more than a decade has gone by, it isn’t surprising that, currently, there are approximately 1600 products of this type are available to users. At the same time, it doesn’t mean that all of them are equally popular among investors. Some of them could draw the attention of crypto experts, while others remained unnoticeable in the market.

Here is the list of the most popular cryptocurrencies in the world:

  • Bitcoin – it became a pathbreaker in the crypto industry and developed a reputation as a mysterious project. There are still many gaps in the information about its origin. However, this mystery around Bitcoin didn’t prevent it from becoming the number-one digital blockchain-based cash. Almost everybody wants to know: how are Bitcoins defined and where to get them?

how to create a cryptocurrency

  • Ripple – another representative of the cryptocurrency world, which plays the role of the virtual asset used for payments.
  • Ethereum – it isn’t only digital cash but also a multifunctional platform, and still its tokens (ETH) are the main topic for discussion. Experts don’t stop making predictions about its value and popularity in comparison to legendary Bitcoin.

Advantages and disadvantages of cryptocurrency

Speaking about the benefits that crypto users get, the main one to mention is anonymity. Let’s be honest: modern Internet users don’t always want to provide personal information, which may be required for financial transactions. Bank and other financial establishments or services deprive their customers of even a slight chance to remain anonymous. In the case of cryptocurrency, its technology and decentralization allow users to skip many unpleasant moments connected with the identification procedure.

Another advantage is, of course, the speed of transactions. At the current time, the fastest speed was recorded with the Apollo cryptocurrency – two seconds! It sounds really impressive and very promising for those payers who are tired of long and tedious procedures, lasting for hours.

As for drawbacks, unfortunately, they do exist as well. First, risks that every investor takes when he or she buys cryptocurrency. Decentralization is both, advantage and disadvantage: cryptosystems aren’t governed by any state institutions, which means that responsibility rests with crypto owners. In addition to this, the word “stability” isn’t peculiar to the crypto market when we speak about currencies’ cost, for instance. If we consider the 2020 Bitcoin price prognosis as an example, we will see that not all predictions have turned out to be the truth.

How does cryptocurrency work: a detailed explanation

As has been mentioned above, cryptocurrency is based on special blocks. They are the core of the whole system because they participate in many important processes. For example, when a new block appears, cryptocurrency is issued.

how does cryptocurrency work

The scheme of operation looks like this:

  • Blockchain user initiates a new transaction.
  • The transaction is transmitted to a node-based P2P network.
  • The network verifies the transaction.
  • Several transactions develop one more block.
  • Blockchain users who take part in allocating power for the verification get a reward in the form of cryptocurrency.

Is it difficult to create your own cryptocurrency?

It is a rhetorical question whether the process of digital currency creation is difficult or not. In general, everything mostly depends on a user’s knowledge about blockchain technology and the availability of skills necessary for fulfilling this task.

On the one hand, the technical aspects of this process will never be simple as they require more knowledge than just basic insight into the crypto industry. On the other hand, if you are deeply versed in blockchain programming, the task will seem much easier to you. Basically, you need to know such programming languages as Python, Java, C#, etc. The more skills and tech knowledge you have, the simpler the process of creation will be.

How to make a cryptocurrency: step by step guide

There are several ways how to create a cryptocurrency. Each of them has pros and cons. An overview of every method will help you to understand which of them will be the most convenient for you.

Creation of a coin or token

The creation of tokens is one of the easiest ways. Again, for those who have a technical education and are good at blockchain technology. The first thing a creator should do is to develop a new smart contract and specify the limits for the supply of tokens. The next step is to enable sending and adding tokens. Then, you can assign a name and symbol to your new token, set the transfer parameters, and, finally, release it.

The procedure of the coin creation is more complicated. You will need great expertise in decentralized finance to succeed. After copying a part of any cryptocurrency code, you will need to make certain alterations to it. Moreover, you will need special coding skills for maintaining your coin and its future operation. In the majority of cases, this task will be too difficult for one person. So, you will face the necessity to hire a team of experts who will be able to help you with this.

how to make a cryptocurrency

What tools to use?

As the cryptocurrency market is constantly developing and more and more people want to participate in it and create new products, some blockchain-based platforms have developed solutions and tools for this. Take a look at the table below:

Tool

Ethereum

EOS

NEO

Functionality

Ethereum has very user-friendly documentation, which helps developers to create their products faster. Its framework allows developing decentralized applications in several easy steps using the HTTP API. The Ethereum token standard, ERC20, has very clear guidelines for tokens. However, Solidity is the only programming language that can be applied in this case.

Unlike Ethereum, developers can create tokens based on popular programming languages, for example, C++. In addition to this, EOS can be extended easily, when it is necessary. The system offers users a convenient platform for the development and management of EOSIO.Tokens.

This open-source blockchain project is focused on the smart economy. NEO is a perfect choice for creating a new token for programmers because it supports the most common languages, including Python, Kotlin, and Java.

Advantages

The most reliable solution as it has been operating in the market for a long period.

A big number of transactions available per second.

A very developer-friendly community.

7 stages of the cryptocurrency development

First of all, if you aren’t an expert in blockchain technology, you should understand that the process of the creation of a new token looks like … coding. In other words, you will need to write a source code for your personally developed crypto product. That is why, to introduce a new cryptocurrency to the world, you may choose one of two ways: hire a programmer or do it yourself if you have the necessary skills.

The decision about what method to choose depends on your goals in this journey. If you want to be the creator of a unique product and the only person involved in the process, you can do this task without the support of third parties, although it is quite difficult. At the same time, experienced and talented software engineers have enough skills for creating the required piece of code.

Here is the description of the process for Ethereum:

  1. Create a token. To do this, you should deploy a new contract in the wallet. Again, this stage will require coding skills as you will need to add more lines to the existing code.
  2. When you have a token and a contract connected, the next step is to make your newly created crypto-cash movable. To do this, you should add certain specifications that will allow users to send tokens.
  3. Now you need to create so-called “Events”. Their task is to enable wallets to monitor contracts’ movements.
  4. Now you are ready to deploy your token. The “Deploy new contract” button and further instructions will help you with this.
  5. One of the most important steps is to specify the value of your token.
  6. The final stage is, of course, testing. Check whether everything operates appropriately by sending tokens to your friends.

Is it expensive to develop crypto-cash?

The question about the cost of project development is undoubtedly the main one. It is important to know how much money you will spend during the process of creation. Very often, crypto enthusiasts are very motivated by the idea to generate a token at the beginning, but after the calculation of the costs, they just choose to buy blockchain stocks.

create your own cryptocurrency

The sum of money necessary for the implementation of such a project depends on several factors. One of them is, as has been mentioned above, the number of people involved in this task. If you work with a team, you pay them a salary as well, in addition to other expenses. Moreover, the work of qualified IT specialists will cost you pretty much. Another aspect is a method you prefer: development from a scratch or on the basis of a ready-made blockchain system.

On average, the cost of the processes is the following:

  • Cryptocurrency development – from one thousand dollars to $100 000 and even more.
  • Security check – from three to ten thousand dollars.
  • Development of documentation – from five to seven thousand dollars.
  • Placement will cost you more than five thousand dollars.
  • Product promotion and improvement of brand awareness in the market – approximately ten thousand dollars every week.

As you can see, even if you create cryptocurrency by yourself and don’t hire a team to help you with the technical side, sooner or later, you will need to spend money on employees who will maintain and promote your product. Otherwise, you won’t be able to make it competitive and successful. What is more important, you can’t benefit from it, unless it is introduced and popular in the market. That is why you will need to invest money in your project at least at one stage of its operation. If you don’t do it just for fun and want to get real profit from your project, be ready to spend money on it before earning them there.

How much time does the project development require?

how to make a new cryptocurrency

They say that time is money, and it is a real truth. The creation of a cryptocurrency may take a long period but everything mostly depends on the number of people participating in this and the level of their blockchain programming skills.

In general, the development may last half a year. However, sometimes, it can take just a few hours, days, or a couple of months. Skillful marketing experts will need a month to promote your product in the market. Anyway, the time varies from project to project because all of them have different requirements, budgets, and teams.

Read more: Key facts about Ethereum

Read more: Advantages of blockchain sports betting

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Frequently asked questions

How to make a new cryptocurrency?

Do it by yourself or hire a team of specialists.

How to make your own Bitcoin?

Create your digital currency by using blockchain solutions or from a scratch.

How to make your own blockchain?

Choose a platform, create an API, design nodes, an instance, and a user interface.

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