Let’s say you want to make your own cryptocurrency. Where do you start? What do you do? The first step is choosing what kind of cryptocurrency you want to make.
There are 2 different types of cryptocurrencies: Coins and tokens.
A coin is a cryptocurrency based on its very own proprietary blockchain, that has been developed by its developers. Making a new blockchain from scratch is time-consuming and difficult, but in some projects, it’s required. The alternative is a token.
A token is based on an existing blockchain like Ethereum. This is the more cost-effective and easier option, but as mentioned earlier, some cryptocurrencies absolutely require a blockchain developed from the ground up. Once you have chosen one, it’s time for the next step.
You need funds to further develop your cryptocurrency. These can be acquired through an Initial Coins Offering (ICO), where people invest in your cryptocurrency in exchange for tokens. To conduct your ICO properly, you want to make a roadmap for the future of the coin so the investors know what they’re getting themselves into. After that, you have to create a smart contract. A smart contract is like a physical contract, except it executes on the blockchain and cannot be altered. There are a set of pre-defined rules inside a smart contract. A smart contract is like a middleman, except there is no “trust” involved since it’s just code. You have to define the rules yourself on your own cryptocurrency.
The next logical step on how to make a cryptocurrency would be to get safety audits. Your smart contract might have unknown vulnerabilities that hackers may exploit. To make your cryptocurrency secure for both parties, users, and investors, security audits are absolutely necessary.
All of these processes are not cheap and require a lot of capital. That’s why an ICO is almost always necessary. You also want good marketing to get the word about your cryptocurrency, which will result in more investors. Once you have done all of this, have gotten an investment, and now have a functioning cryptocurrency; you want an active development team that’s constantly pushing bug fixes and security patches to make sure that the cryptocurrency stays up-to-date and doesn’t develop vulnerabilities and backdoors.
After all this, you need an active community where new users can ask questions and get help. The more community engagement your cryptocurrency has, the higher its chances of growing. Once this is done, you will have to work with companies to integrate your coin into their payment methods, and exchanges will want to host your cryptocurrency. Remember, there are thousands of cryptocurrencies out there, and to succeed, you want to have an original idea that stands out from the crowd!