How Hard Is It to Create Your Own Cryptocurrency?

How Hard Is It to Create Your Own Cryptocurrency?

It depends on your goals, time, money and ability to maintain the cryptocurrency after it launches.

As a startup, you might be tempted to launch your own cryptocurrency to raise funds more seamlessly and in a decentralized manner—be it through an initial coin offering (ICO) or an initial DEX offering (IDO). After all, according to the President of Bone Fide Wealth in New York, Douglas Boneparth, “There are a lot of things that make crypto very attractive; the biggest one is the opportunity to make a lot of money.” Given that, besides investing in it, many people have been attempting to create their own cryptocurrency. In fact, blockchain platform Ethereum boasts about 1,300 full-time crypto developers today. Another platform, Terra, witnessed over 300 percent growth in the number of developers in the past year. 

More and more blockchain developers are optimizing on the growth potential of cryptocurrency. So, there’s no reason you should miss out on it. 

But first, should you launch a crypto token or coin?

When it comes to launching your own cryptocurrency, you have two options: you create a token or a coin. While tokens can be created on existing blockchains, like Ethereum, coins require blockchain development from scratch. Additionally, tokens are faster and cheaper to create than coins are. However, the latter offers more design freedom and flexibility. With tokens, you also get the security features offered by the blockchain. That way, you don’t have to worry about creating provisions of your own. Ultimately, what you choose depends on your ultimate goal. If you want to create a decentralized finance (DeFi) app or a play-to-earn game, a token will be right for you. On the other hand, if you want to expand the possibilities of blockchain and enhance innovation, opt for coins. 

How to create your own cryptocurrency?

Before getting into the details, remember that, to create a cryptocurrency, it requires technical knowledge, time, money and patience. Also, the work doesn’t stop once you’ve made your cryptocurrency. In fact, the real effort is in its maintenance. That said, here are the four ways in which you can create cryptocurrency:

1. Establish your cryptocurrency on an existing blockchain

This is the quickest and most affordable way to set up your cryptocurrency token. To start with, figure out which blockchain platform is best for you. What is the consensus mechanism you prefer—proof-of-work, proof-of-stake or others? Do you need smart contracts or data authentication? What is your budget? Your answer to these questions will help you find out on which blockchain platform you should set up your token. Some of the most popular platforms include Ethereum and Binance Smart Chain. After that, you need to create your token. You can do so yourself or employ the assistance of an app, such as Wallet Builders. Finally, start minting! Promote your token and encourage people to trade in it. 

2. Modify the code of an existing blockchain

To set up your coin, you can copy the code from an existing blockchain and use it for your coin, as most are open source and available freely. This way, you can edit the code to include your preferred design elements and the like. However, you will need to give due attention to the legal and security requirements, as your coin won’t be protected by the features of the blockchain that you copy the code from.

3. Create your own blockchain

Perhaps the most time-consuming of them all is to make your own coin by creating your own blockchain. To do so, you require excellent coding skills to create the code for your blockchain. You do get plenty of freedom with it, as you can decide the platform specifications, including permissions, address formats, mining rewards, CSS design and more. You can also decide if you want the platform to be private, public or hybrid.  

4. Hire a developer to create your cryptocurrency

Instead of creating your own cryptocurrency, you can hire someone skilled in the area to build it for you. This way, you will be able to create a more refined platform, which meets your requirements. Yes, this may be very expensive; however, the outcome will be reliable and efficient.

The legality of cryptocurrency—and its creation—varies from country to country. For instance, in the U.S., you might need to obtain a cryptocurrency license to trade your coin. When you create a token, you are protected by the blockchain’s legal regulations. However, if you’re launching a coin, you might be subjected to securities regulations, as countries are still figuring out how to navigate the crypto world.  

All things considered, the difficulty level of creating a cryptocurrency depends on your goals and the approach you take to building it. Besides, the real challenge is maintaining the cryptocurrency and promoting it. According to a 2018 study, more than 50 percent of ICOs fail within four months of launching. So, when setting up your cryptocurrency, follow the advice of the lead technology developer for Kadena, Monica Quaintance, and focus on four elements: speed, safety, scalability and simplicity.

Header Image by RODNAE Productions from Pexels

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