Before you start creating your own cryptocurrency, it is important to know why you’re making one in the first place. While the technical aspects of cryptocurrency creation is easy, it is the process of making a digital currency valuable that is difficult. Two critical features of cryptocurrency creation – your intent and the digital infrastructure that would make your digital dream a reality – need to be considered if you’re serious about creating a currency that will generate lasting interest. Below are essential things you need to know in order to make your own virtual currency.
Know the basics of the digital infrastructure
A coin and a token are both cryptocurrencies. Their difference lies in the infrastructure in which they operate.
You need not know the technical intricacies of coding to make your own digital currency. Simply acquire the assistance of a person who knows how to code. Then, decide on the following: do you want to create a coin or a token? Do you want to build your own block chain or use, and eventually modify, an existing one? A blockchain functions as a secure record of all transactions made on a network.
If you want to create a coin, and you have little to no knowledge about coding, an expert developer can help you. A developer’s technical coding skills can build a block chain unique to your coin. A blockchain functions as a secure record of all transactions made on a network. Coins therefore carry their own independent transaction ledgers. However, an option exists where you can utilise an existing block chain by acquiring the open-source code available on Github, altering it according to your coin’s needs, and launching it with a new name. Numerous cryptocurrency creation services companies are able to do all the technicalities required to create and deliver a coin. Some even offer already-existing templates that only requires you to give a name to your unique coin as well as a symbol. Some services can create a highly customised coin by simply allowing you to enter specific parameters (such as the quantity of coins to be awarded when one signs a block).
While the function of digital coins is to transfer wealth, a token essentially functions as a “contract” on anything such as tickets, loyalty points or physical objects. Also, tokens don’t have their own blockchain and instead rely on the technology of an existing network in order to secure and verify transactions as well as ownership. Tokens exist atop an already functioning blockchain infrastructure. They are also released via a crowdsale referred to as initial coin offering – an event where existing coins are exchanged in order to fund various projects.
Creating tokens is easier compared to creating a coin as the former requires relatively little time and effort to make and maintain due to its reliance on an already existing technology utilised by top cryptos such as Bitcoin or Ethereum.
Know your intent
Being knowledgeable on the infrastructure where crypto currencies stand on is only half the battle. Having created a cryptocurrency is simply the beginning of a long challenging process. The hard work lies in making the coin be attractive to miners/investors. They should also be able to maintain its worthiness – now until the future
Chris Ellis, a UK entrepreneur and community activist at open source cryptocurrency Feathercoin, advised that coding a coin is not the first step in creating a cryptocurrency. He advocates that one first find a community of like-minded individuals and then build a currency around that. He explained, “The first step is to find a community and build a currency around them rather than building a currency and expecting everyone to show up.” He adds, “It has to be sensitive to their needs and be relevant to their cultural heritage and background.”
Ellis similarly highlighted the need to spread the word of the crypto’s existence and getting potential miners to trust it. He expressed the importance of being honest as well as not to underestimate the “soft stuff”, which include team building and good communication. Also, he believes that not everything can be solved by technology. He claims, “They think that throwing technology at a problem will make it disappear. Central banks think throwing money at problems does the same; the world has never worked this way. You have to be good at knowing what work needs to be done and be prepared to do the jobs nobody else wants to do.”
Also, he encourages a more grounded view of one’s goals when creating cryptocurrency. He reminds everyone that since no currency dominated the world during the last 5,000 years, no such currency will be dominant now. He advocates going local, and encourages the use of cryptocurrencies within cities, neighbourhoods, or groups of people – essentially those who share similar purchasing power.