How to Create a Cryptocurrency?
Cryptocurrency is one of the world’s best profitable innovations. You might hear it from a friend, read it from the news, or search for it on purpose. Maybe you even have an idea of how to create a cryptocurrency. The urgency that you feel is normal. Why? It is because the world is changing right in front of our eyes. Only those who will take a step to start a new business idea or plan a launch have the chance to make the most out of the available resources at present. But how exactly can someone ordinary create a cryptocurrency?
The internet is full of irrelevant and relevant information. It often sounds contradicting and antagonizing. This article will give you the basic knowledge to help you make your own cryptocurrency. There is an overwhelming set of tasks that must be done. It’s time to start!
How Does a Cryptocurrency Work?
First, refresh yourself with the meaning of currency. It’s usual to think about coins and bills or dollars and euros. That’s right! A currency is a unit that accounts for a specific value and a means of exchange. It is the price accepted globally and has a certain power to obtain actual goods and services.
On the other hand, cryptocurrency is defined as a digital currency that is carefully encrypted to generate new units. It functions the same as the traditional currency but runs inside a decentralized platform.
If you have a plan to create your own cryptocurrency, take note that cryptocurrencies don’t have banknotes. Instead, they operate using coins and tokens. Aren’t coins and tokens similar? No, they are two different units. Read and learn more.
Difference Between Coins and Token
Before moving forward, it’s crucial to know the difference between coins and tokens. The only similarity that these units have is that both of them fall under the functionality of cryptocurrency.
Coins like Bitcoin or Digital Yuan tend to exist on their own blockchain. Tokens exist on top of a successful blockchain technology system like Ethereum and Yuan Pay Group. Tokens cannot stand alone because it has no value outside a certain community or platform. Coins can be used anytime and anywhere. Coins can buy tokens, but tokens cannot purchase coins.
In short, you need to have your own blockchain if your dream is to “create my own cryptocurrency.”
Advantages and Disadvantages of Cryptocurrencies
There is a growing list of advantages concerning cryptocurrencies. The only disadvantage right now is the never-ending competition. But if you can come up with a great idea that is potent and authoritative, you are ten levels ahead of the game.
Trading License and Authority
A cryptocurrency company is entitled to a legal and confirmed crypto trading license. As you create your own official coin, it is appropriate to guarantee the best prices and safe storing of coins to your users. Remember, if what you have in mind is to make my own cryptocurrency project, then you should obtain a lawful precedent to sell these coins. There should be no other else offering them. You should be the only one entitled to issue your own coin.
The user should not incur any fees from any trade through your encrypted system with your own cryptocurrency.
High-Quality Software Management Tools
With your cryptocurrency, you can give the opportunity to trade CFDs inside your blockchain system.
You are free to work and partner with major financial institutions that can assist your users in sourcing funds and transfer the same directly to their bank account.
Fraud Risks Avoidance
With cryptocurrency, it is impossible to reverse past and future transactions.
Your customers can limit their sharing of information.
No holidays, business hours, or geographic discrepancies can affect you. Cryptocurrency works 24/7.
Since cryptocurrency exists within a decentralized system, no financial institution can freeze and hold your customer’s account.
How to Create a Cryptocurrency: Technical Matters
When it comes to technical matters, there are eight steps that you can follow to create your own cryptocurrency.
- Know your purpose
- Decide your consensus mechanism
- Create your own blockchain platform
- Design the nodes
- Build your blockchain system infrastructures
- Don’t forget the APIs
- Design interface
- Legalize your cryptocurrency
Its uniqueness and functions depend on your own discretion as a creator. We will further discuss each of the steps at the end of this article.
Ways to Create a Cryptocurrency
Generally, without discussing the technical matters, there are three main ways to create a fast and easy cryptocurrency.
Create Your Own Blockchain
Creating your own blockchain from the very first step takes delicate coding skills. It is, in fact, one of the most difficult methods to create a cryptocurrency. There are paid online courses that can formally help you through the process. All of which assumes that its readers have a certain level of knowledge and familiarity with the topic. But you might get everything you need to learn in order to create your own blockchain. It needs a series of information plus trial and error.
Fork an Old Blockchain
Forking an existing blockchain is a lot easier and more understandable than creating a whole new blockchain. This would basically involve taking the open-source code found on the encryption system, altering it directly, then launching a brand new coin with a unique name. For example, the developers of Litecoin created it by forking the old blockchain of Bitcoin. This strategy still needs the creator to understand how to enhance the existing code carefully.
Choose an Existing Platform
The third and simplest option for those who have zero coding knowledge is making a new cryptocurrency out of an existing platform like the very popular Ethereum.
If you’re not familiar with the basics of how to make your cryptocurrency, writing code is challenging. You can also consider hiring a creation service that does all the technical work and then hands you a complete product with authority.
Popular Solutions for Making a Cryptocurrency
The most popular solution for making a cryptocurrency is to get a team of experts.
You cannot do this alone. Your company’s future coins need to have a defined purpose for future investors. In addition, your organization must be registered because potential users will treat it as their security against breaches.
To get started, you need a team of experts in every field. You need someone who is good in marketing, finance, technology, consultancy, and all. High-profile investors will only get attracted if your project seems credible enough to become a successful cryptocurrency.
A high-level process like creating cryptocurrency involves a team of experts. This phase is unavoidable.
How to Make a Cryptocurrency: Key Business Processes
Did you know that you can also create a cryptocurrency for your business? Here are the major reasons why cryptocurrency can help you enhance your key business processes.
Pay Your Employees in Cryptocurrency
New generation companies are now considering paying their employees using cryptocurrency. The company could set a specific date each month to issue a reasonable fiat-crypto conversion rate. They have the option to freeze and hold this rate in connection with the conversion rate for their employees’ monthly payroll. In certain cases, where the actual disbursement of salary is applied at a later date, the issued cryptocurrency’s market price could still be used as the effective conversion rate.
Today, many companies are continuously honing this development. If you plan to practice it as well, business owners should consult and study their staff on the value of the cryptocurrency that the majority prefer to receive. As different employees have different financial priorities, it would be more reasonable to ask the employees how much salary they would like to receive in actual cash and cryptocurrency. Employees who are risk-takers would most likely agree to receive 50% of their salary in cryptocurrency, while others might take between 5% to 30% of their net salary in cryptocurrency.
Pay Your Suppliers in Cryptocurrency
The main advantage of paying suppliers in cryptocurrency for business owners is the hassle-free transaction. It will only take a few minutes, not days, to completely transfer your payments. It cuts out the middleman fees such as banks and other remittance companies.
Moreover, cryptocurrencies promote better liquidity than using traditional currencies. This is evidently true in foreign markets that crave the cost-effective flow of their own currencies worldwide. The common barriers that business owners might face in the ordinary course of business are all eliminated. As a result, cryptocurrency transactions are fast and internationally accepted.
Issue Dividends in the Form of Cryptocurrency
Yes, you read it right! Companies could offer their own cryptocurrency-denominated dividends if they have their own digital currency and issue investors with the said cryptocurrency coins. However, they are not allowed to give away other privacy coins such as Bitcoin and Litecoin. The issuing company itself must own the cryptocurrency-denominated dividend. No more, no less.
How to Make Your Own Cryptocurrency: Example
After discussing the important points above, you can officially start creating your own cryptocurrency.
Know Your Purpose
Are you planning to create your own coin because of profits? Do you want to improve your business operations? What is your purpose for creating your own cryptocurrency? You need to address this first before you can come up with a solid plan.
Decide Your Consensus Mechanism
A consensus mechanism is a control that identifies if the network will accept a specific transaction. All nodes are reviewed before confirming each transaction that took place inside your own system. This is the process called “achieving consensus.” You will need to formulate a unique mechanism to set the behavior of the node with a certain transaction.
Create Your Own Blockchain Platform
This phase goes back to the basics. A coin needs a safe place to live. Deciding what kind of blockchain environment you want your coin to exist in is a very significant step. The design will depend on your technical skills. You should be familiar and comfortable with it, and everything must be in line with your project’s purpose.
Design The Nodes
Nodes is the term used to describe the backbone of any DLT (distributed ledger technology). As a developer or creator, you can program how your nodes will function. These include the hardware and hosting functions.
Build Your Blockchain System Infrastructures
You have to be 100% sure that the functionality of your blockchain correlates with the design of your nodes. Once you launch the system, there is no pause or break allowed. Many things cannot be edited instantly. That’s why it’s normal to have a try-out. This includes the cryptocurrency address and IBC protocol (inter-blockchain communication) to let your new blockchain have meaningful trial communication with other blockchains.
Don’t Forget The APIs
This is optional. Many developers consider APIs because it enables them to harness real-time crypto trading information. These are special sets of functions where only authorized data are allowed to operate inside the system.
This is done regularly. The design interface is a continuous process. It needs constant upgrades and clearing activities. If you are a developer, both the front and backends are your major concerns.
Legalize Your Cryptocurrency
Cryptocurrencies are often seen as illegal. Well, there are a lot of them out there. Today, the world views it as the future of the economy. Before looking at the bigger side, it might be a good action to research the rules and regulations in your country. There are regular updates in the world news. It is also a smart move to hire a lawyer with expertise in the area where you plan to register.
Are you still on the lead? As you can see, the idea of knowing how to make my own cryptocurrency is a broad topic. Apart from reading this article, you need to enroll in a formal programming class to learn the step-by-step process of how to create a cryptocurrency. You can also try familiarizing yourself with this industry before you build your own company. Visit us at https://yuanpaygroup.com/ for more details.