How To Create A Crypto Coin?
Let’s have it straight: anyone can learn how to create a crypto coin. However, depending on your goals and ambitions, the process can take anywhere from 15 minutes to a couple of years.
We are going to explain three ways to create a cryptocurrency. From the most difficult to the easiest, let’s dive in!
- Create your blockchain
- Fork an existing blockchain
- Launch a token on an existing platform
What is the difference between a Coin and a Token?
It’s essential to understand the difference between a coin and a token and decide what you want to achieve with it. Both are cryptocurrencies, however a coin runs on its own blockchain, while a token is created on existing blockchains with an established user base. Coins are used as traditional cash – transfer and receive funds, while tokens can be anything – rewards, art, event tickets, or non-fungible tokens (NFTs).
So, to summarize, there can be only one coin on a given blockchain, and users spend it to make any transactions. Within a blockchain, there can also be many tokens, and each of these serve a particular decentralized app and can also migrate between blockchains.
To explain further, let’s use Ethereum as an example. Ethereum is a blockchain, and it has a native crypto coin – Ether. We also have various tokens built on the Ethereum blockchain: including Tether (USDT), Shiba Inu (SHIB), and Uniswap (UNI).
Since it is costly and time-consuming to create your own blockchain and native coin, token development provides a much simpler, faster, and comparatively cheap method to capture value.
A few things to consider before designing your crypto coin:
What value does your cruptocurrency deliver to others? You have to think about why people should buy and use your cryptocurrency and what problems it solves.
Regulations and legal requirements
Cryptocurrency is developing rapidly, and one of the main problems is that laws and regulations change every day. Some countries love crypto, and some may even ban it. Make sure to fully understand your legal obligations and any compliance issues.
Tokenomics – is a term that describes the economics of a crypto. It includes initial pricing, supply, emissions, distribution, market capitalization, and potential value. It’s always a good idea to understand the tokenomics of the crypto project before buying it. Project with well-designed tokenomics is considerably more likely to succeed in the long run.
Create your own blockchain
- Choose a consensus mechanism
The first step is to decide how network participants will agree on the validity of transactions, how to add a block to the chain, and how to reward validators. There are many consensus algorithms, and you need to choose the one that suits your business needs.
One of the most popular consensus algorithms is Proof of Stake, and you might want to look at it since it’s energy-efficient and provides fast and inexpensive transactions. Bitcoin employs Proof of Work; however, it is often criticized for being harmful to the environment.
- Design the blockchain architecture
Define if you want to have a public, private, or hybrid blockchain by determining who can create new blocks, validate transactions, and access data. Think about what you want your addresses to look like. You also need to consider other things like maximum block size, transaction limits, and further technical details.
It’s the most crucial step where you decide on the whole logic of your network. Many elements must be carefully considered
- Create a User Interface
One of the end goals is for the users to enjoy utilizing your crypto and interacting with the network. You can not achieve that without an appealing user interface. You also must ensure that the web, servers, and external databases are up to date and that the front-end and back-end programming is designed to accommodate for potential changes.
- Audit crypto and its code
Many cryptocurrency developers hire expert blockchain auditors, like Certik, to look through their code and find any flaws. This process provides quality assurance and encourages users and investors to pay attention to the project.
Fork an existing blockchain
Forking an existing platform is a fantastic option if you want all the power and benefits of the current blockchain but want it less cost-effective and time-consuming. Even though you still need some technical knowledge, it is much easier than creating your own blockchain.
Most blockchain codes are open-source and may be found on GitHub. Anyone can clone the git repository and create a similar blockchain environment. It is a common solution for custom blockchain development that aims to enhance a current business solution and add your own specific features.
Launch a token on an existing platform
- Choose the blockchain platform
There are many popular options, including Ethereum, Binance Smart Chain, and Solana. However, looking at the sidechains and expanding your choices is always good. Sidechains add customization with the main blockchain’s benefits.
- Create token
- Mint your new cryptocurrency
After finishing the steps above, you are ready to mint your tokens! The exact way will depend on your choice of the blockchain platform and consensus algorithm.
Creating a cryptocurrency is only the beginning. Besides technical aspects, crypto creators must consider business and marketing strategies to maintain the network, deliver value to users, and convince others to buy it. A huge amount of work is required to make your cryptocurrency successful and valuable to the community.
Investing in cryptocurrency might be the better option for those who don’t have the time or funds to create a crypto coin. The Tokenmetrics Premium Plan makes it easy to find and invest in cryptocurrency and build your personal wealth.
To learn more about everything crypto, see our Learn Section.