If you are not a programmer but carefully follow all news about Bitcoin and other cryptocurrencies, then sooner or later you might come up with the question; “can I create my own cryptocurrency?” In short – Yes! You can do it. However, there are many pitfalls that need to be studied before you immerse yourself in the creation of your own cryptocurrency.
What is the Difference Between a Token and a Coin?
First of all, it is important to understand the difference between coins and tokens. Both can be called cryptocurrency, but if coins (such as bitcoin or litecoin) work using their own blockchains, tokens live on top of existing infrastructure, such as the Ethereum blockchain. Blockchain, in fact, is a record of transactions protected by the network.
So, coins have their own independent transaction registers, and tokens rely on some third-party network to confirm and secure transactions. Coins are often used to transfer financial assets. Tokens have much more functions – this is a kind of digital contract for almost anything; physical objects, events tickets, loyalty points, etc.
Tokens are often issued through crowdsales known as the Initial Coin Offering (ICO) They get exchanged for existing coins, which in turn finance projects such as gaming platforms or digital wallets.
You can get public tokens after the end of the ICO, as well as buy them using the base currency to make a purchase. Since now any person can create a token and run crowdsale, ICOs are becoming more and more risky. Unfair businesspeople take money from investors and run away, leaving the project.
The U.S. Securities and Exchange Commission (SEC) tries to control this process and seeks to turn tokens into securities, which, like shares, will need to be regulated. The SEC warns investors about risks of purchasing tokens during public ICO rounds and insists on thorough research of all projects.
Despite the fact that crypto markets are very volatile these days, experts believe that they will stabilize once more people accept and adopt cryptocurrencies. In general, the very idea of cryptocurrencies is built around wide availability and accessibility, but this does not mean that it is easy to understand it. Let me now present you the ways to create your own coins or tokens.
Should I Create my own Blockchain or Make a Fork of an Existing One?
Both methods require quite a lot of technical knowledge or the help of an experienced developer. Since cryptocoins are based on blockchain technology, you will either have to build your own or take an existing one and tailor it to the new coin needs and ideas.
The first method will require serious programming skills. Even though there are already many YouTube video courses and other teaching aids for step-by-step execution of this task, they assume a certain level of knowledge. Even if you do everything right, you may face a lot of unexpected problems.
Alternatively, you can initiate a fork of an existing blockchain using an open-source code that can be found, for example, at GitHub. You will need to make several changes before launching a new blockchain with a new name. Again, this requires you to clearly identify the goals of the project and understand the code so that you know what you need to change and why. There are no universal technical solutions here.
Creating a Coin or a Token Using Specialized Platforms
This option is suitable for most people; platforms will do all the technical work for you. For example, CryptoLife helps to create the simplest coin. All you need to do is enter the necessary parameters like the logo, number of coins received by miners for signing a block, etc. They even have pre-built templates where you only need to specify a name and a symbol. The base price of this service is 0.25 BTC. WalletBuilders is a similar service; prices start at 0.01 BTC, and there is a free test version.
You can also create tokens, smart contracts, all with or without a public ICO. Since tokens can represent any asset, you can even create a token that does not have real value or a serious purpose, except for the possibility to be exchanged between friends. It is faster, easier and cheaper than building a coin because it does not take time and effort to develop and support a new or ramified blockchain.
If you want to make one step further and create a coin with real value for a wider audience, a coin that can be bought, sold, mined, but you do not have programming experience, you probably need the help of one or more developers. Mind that if you use the above-mentioned services to create your own cryptocurrency, you will need to support it, and it will not be cheap and safe.
Dealing with Other Important Issues
Nevertheless, the technical part of creating a cryptocurrency is not really the most difficult part of launching a successful crypto project. The biggest difficulty is in presenting and marketing your new coin. You need to convince people of its symbolic value, build the infrastructure, support the community. After all, even such “meme” coins as Dogecoin, Garlicoin, or PepeCoin, have their own developers and user communities that support the stability of these projects.
In addition, stats numbers are cruel; many cryptocurrencies are unsuccessful, some are doubtful from a legal point of view. There are different reasons for this, maybe they failed to run a quality ICO, or the coin failed to provide long-term interest. No wonder that the term ‘shitcoin’ appeared, and it seems that it does not intend to disappear.
Therefore, before deciding on such a responsible step as launching your own cryptocurrency, it is worth to weigh the pros and cons, determine the purpose of its creation, develop an action plan, and conduct market analysis so that eventually your new cryptocurrency does not become another ‘shitcoin.’