One of the words that you simply cannot and should not avoid these days is cryptocurrency . It is indeed a very fast-paced world that we live in, and if any chance you happen to miss this bus, well, you will be left far behind and the world will rush past you. But do not worry because I have got your back.
It might be that you have no idea what cryptocurrency is, let alone how to make a cryptocurrency. But it is never too late to take the right steps! So here I am, with all the information that you need when it comes to what cryptocurrency is and how you can create a cryptocurrency .
You might have this amazing business idea on launching your startup, but it could be a problem in case you do not have sound knowledge about cryptocurrency. That might even make you lose out on a lot of lucrative opportunities. Be sure to forget all these doubts and apprehensions, because, by the time you finish this article, all your doubts will be cleared.
What is Cryptocurrency?
Cryptocurrency is a digital currency that relies on encryption in order to generate new units and also to confirm transactions . Cryptocurrency is digital and decentralized money that is based on blockchain technology . A cryptocurrency has all the functions that a regular currency has, with the difference being that it does not run outside from a single and centralized platform, like a bank.
Unlike regular currency, cryptocurrency does not have banknotes, but they do have coins. Now, it is important to keep in mind, that cryptocurrency coins should not be confused with tokens. Do not worry, because I shall get into the details of coins and tokens later in the article.
How does Cryptocurrency Work?
You can easily use cryptocurrency to purchase regular goods as well as services. But what the majority of the people do is invest in cryptocurrencies like they would invest in other assets, for example, precious metals or stocks. It is always advisable that you do your needed research to fully comprehend what you are getting into before you actually start investing.
I say this because, as exciting and novel an asset cryptocurrency might be, it still cannot be separated from certain risks that are inevitable . It was Satoshi Nakamoto , who, in the year 2008, first outlined all the principles of Bitcoin , which was the first-ever cryptocurrency. It was in his book “ Bitcoin: A Peer-to-Peer Electronic Cash System ”, where he went on to describe this as “an electronic payment system based on cryptographic proof instead of trust”.
This cryptographic proof that I am talking about, comes from transactions that can be verified at the same time recorded on a blockchain . Now, to define what a blockchain is, it is an open ledger that is used to record the transactions in coded language. If I put it in an even simpler manner, imagine a checkbook that is distributed all over the world among countless computers.
The transactions then made, are recorded in form of “blocks” which are then linked with one another on a “ chain ” of previous transactions of cryptocurrency. That is what a blockchain is.
“Imagine a book where you write down everything you spend money on each day. Each page is similar to a block, and the entire book, a group of pages, is a blockchain. “
– Buchi Okoro, the CEO of Quidax
Crypto Coins vs Tokens
Do not feel lost if you tend to get confused with these two terms, because almost everyone, at some point, has made this mistake in their journey to make a cryptocurrency. In your defense, you might say that tokens and coins are very much alike on a lot of levels , and you are not wrong. But having said that, there are a lot of differences as well, which you must keep a track of.
The main difference that crypto coins and tokens have ultimately comes down to how we utilize them. Let’s get in the details so that from the very beginning you know what you are dealing with. A crypto coin operates on its blockchain . That chain keeps a track of all the transactions in which its native crypto coin was involved.
A crypto coin acts as money. The sole purpose to make cryptocurrency was to enhance anonymity and transparency. Be it Bitcoin, or Litecoin, ETH, or NEO, these crypto coins all act as money. The next thing that you should know about coins is that they can be mined . There are two ways by which you can mine coins, one is through the Proof of Stake method, and the other is through the Proof of work method.
Now that you have a fair idea about what coins are, let me take you through the basics of tokens. Firstly, unlike coins, token does not have their individual blockchain . They operate on blockchains of other crypto coins. When you spend a token, you literally move it from one place to another, which does not happen in the case of coins. One of the best examples of that is Non-Fungible Tokens or NFTs.
One of the main points of difference between coins and tokens is that, while tokens represent deeds or assets, coins, on the other hand, represent the digital version of money. If I put it even more simply, a coin denotes the power you have you own something while a token denotes what you actually own.
How to Make a Cryptocurrency?
Now the question comes as to how you can actually make a cryptocurrency. Not to worry because I have got your back. Now that you are ready with all the basic information, it is time you know how to create a cryptocurrency. The first thing you need to do is to choose a c onsensus mechanism . It means that you need to go through the protocols which consider any particular transaction legitimate or not and also add it to the block.
The second step is to select a platform for the blockchain . This will invariably depend on the consensus mechanism that you had earlier selected. Creating cryptocurrency becomes all the easier when you follow the steps diligently and do the needful things. Like the next thing that you should do is design the nodes . The design of your nodes will depend on the functionality of your blockchain.
Now that you have designed your nodes according to your blockchain, the next step to make a cryptocurrency is to establish the internal architecture of the blockchain . This is a step which you will need to take very cautiously as a lot will depend on it. You will not be able to go back on many decisions once you take this step. So do the needful research and then proceed.
The fifth step to making a cryptocurrency is to integrate the APIs . There are many platforms that do not provide the users with a pre-built API, so in order to get an edge, make sure your one does. This should be followed by you designing the interface.
Remember that you might create a world-class cryptocurrency. But it will still be of no use if your interface is not up to the mark. Making a cryptocurrency will only be successful when you make sure that the web, the external database, and the FTP servers that you are providing are most recent.
Design the interface in such a way that you keep the front-end and the back-end programming and all the future updates in mind. When that is done, the last step left to make a cryptocurrency is to make it legal.
Your cryptocurrency should be aiding with all the international cryptocurrency rules. That way, whatever work you are doing into creating a cryptocurrency will not go to waste. Your work will be preserved and your efforts will not be ruined.
Getting your coin or token listed on a cryptocurrency exchange can introduce it to a greater audience in a safe and regulated way. Every cryptocurrency goes through a rigorous due diligence process, and you’ll need to update regularly of your progress during the application.
How Much Does it Cost to Make a Cryptocurrency?
The prices change every year when it comes to app development trends and the cost to develop them. So, after a point, it can get really difficult to keep a track of everything unless you are always on your toes. But that is not the scenario when it comes to cryptocurrency.
When your objective is to make a cryptocurrency, know this for a fact, that, the market booms at every second, and needless to say, so do the prices for creating a cryptocurrency. When compared with any other trading model, this segment is growing almost three times faster.
It is natural for the cost of any product development to depend on the components that are included in the product. It is the same when you go to create a cryptocurrency. The price will naturally be higher when your process is more complex. Down below, I am attaching a simple table that will give you a better idea about the cost.
Category | Time | Cost |
Legal Counsel | Ongoing presently | 20,000 – 100,000+ dollars |
Development | Six or more months | 100,000+ dollars |
Documentation | One to two weeks | 5,000 – 7,000 dollars |
External Audit | One month | 3,000 – 10,000+ dollars |
Promotion of the Project | Three or more months | 10,000 dollars per week |
Listing on the Sites | One or more months | 10,000+ dollars |
The cost of a cryptocurrency, which by now you must have understood, depends on what you need and what your requirements are . For example, you want to make a cryptocurrency that is custom-made and rich in features, naturally, it will cost you say about five thousand dollars or more. It is thus also important that you choose the correct crypto developers who will help you create the cryptocurrency. If you are in good and dependable hands, things will be far easier and more stable.
Conclusion
This article was aimed at providing you with all the basic details that are required to help you get started on your cryptocurrency journey. All the essential basics like how it works, what is the cost of development, the difference between coins and tokens have all been discussed. I hope this has been helpful in clearing your doubts and has pumped you up to start with cryptocurrency.
The benefits of cryptocurrency are numerous. So do not lose the opportunity of starting something profitable when you have the chance. All it will take is for you to collect the needed data and have the required information, which I am sure you have by now, to set you on your path firmly.
If you decide to make your own cryptocurrency, you can use this information as a starting point. It is a really vast and deep topic and needs a lot of thought on whether to create a coin or token and also making the post launch a success . You can also study other projects and coin launches to learn from their rights and wrongs.