Take a look at the mechanisms provided below such that you know how to make your own cryptocurrency.
Cryptocurrency Creation 101 – A Brief Overview
As a creator, you have the choice to make cryptocurrencies in a number of different ways. Each of these options varies in terms of the ease with which cryptocurrency creation is executed. A relatively straightforward method requires you to create your own blockchain that is native to your cryptocurrency. Else you can modify the code of a blockchain that already exists. If either of these two methods works for you, you have the option to delve into more complex methods via which you can create a cryptocurrency. These methods could have you creating a new cryptocurrency on a blockchain that already exists or can see you hiring a blockchain developer such that he (or she) can create a cryptocurrency for you.
Executing a majority of these options requires you to possess a certain level of technical computer knowledge. Further, you must also possess financial knowledge and be adept in tackling human resources. The more technical the cryptocurrency creation method opted for by you, the greater the extent to which you can customise your creation. Certain cryptocurrency developers are of the opinion that customisation is worth investing in. Continue reading to understand the intricacies pertaining to the four avenues that can be broached by you if you wish to know how to create a cryptocurrency of your own.
Method 1. Creating Blockchain to Support a Native Cryptocurrency
It is possible for you to make your own blockchain by writing its code and having it support a native cryptocurrency. In order to pursue this avenue of cryptocurrency creation though, you would need to have extensive technical training that has allowed you to develop your coding skills sufficiently. By leveraging these skills and using your knowledge of blockchain technology to your advantage, you can play around with the design. This method is a good option for you if you wish to create a cryptocurrency that has an entirely new aspect to it or is innovative in some capacity.
In order to build an entirely new blockchain for your native cryptocurrency, you will need to execute the following steps.
Step 1. Begin by selecting a consensus mechanism which is essentially the blockchain’s operating protocol. Proof of stake (or PoS) and proof of work (PoW) are some of the most frequently used consensus mechanisms.
Step 2. Design the layout for your blockchain and its architecture. This involves your having to decide whether or not your blockchain will be public, need permissions or not and so on.
Step 3. Next, you will need to hire a skilled blockchain auditor to check the code of your blockchain and assess it for any weaknesses.
Step 4. Finally, you must consider enlisting the services of a legal firm such that they can provide you with legal advice prior to your minting any new cryptocurrency. Compliance with pertinent laws and regulations can be verified by lawyers.
Method 2. Alter the Code of an Existing Blockchain
You have the choice to always use the source code belonging to another blockchain to develop a new blockchain and use your own native currency. It is worth noting the fact that you will still need to be fluent in the technical aspects of this as you will have to modify the source code in order to execute the design you have your sights set on.
Once you download and modify said source code of a pre-existing blockchain you will need to enlist the services of a blockchain auditor to scan it for weaknesses. You will also need to seek out professional legal advice to ascertain that you haven’t violated any laws. Once you go through these motions you will be able to mint a new cryptocurrency.
Method 3. Using an Existing Blockchain to Establish New Cryptocurrency
Cryptocurrency creators always have the choice to create new cryptocurrencies without first setting up their own blockchain or modifying an existing one. When looking at the Ethereum blockchain for instance it becomes clear that it has been designed to host cryptocurrencies made by a range of developers. New currency created falls under the category of a token as it is digital money that isn’t native to the blockchain it operates on.
While token creation does require technical expertise to a certain extent, in most instances a moderate level of computer knowledge is sufficient to create a token without much difficulty. Consider the steps listed below in order to understand what token creation entails.
Step 1. Select a blockchain platform (Take for instance Binance Smart Chain or the Ethereum platform) on which you would like to host your token.
Step 2. Depending on the extent to which you would like to customise your token, the measures needed to create it will vary. Ordinarily highly customised tokens required advanced technical knowledge. That being said tools like WalletBuilders can be utilised to understand how to execute token creation.
Step 3. Once you’ve created your cryptocurrency you can begin minting new tokens. By using trusted platforms such as those mentioned in step 1 you don’t need to enlist the services of an auditor or lawyer prior to issuing a set of tokens.
Given the fact that tokens aren’t as customised as coins, they are a relatively faster and far more affordable way of creating cryptocurrency. Tokens created can benefit from the security measures that established blockchain platforms have. Further, said platforms may provide innovative features to token creators. By associating your token with a well-established blockchain platform you can boost your token’s credibility and value.
Method 4. Enlist a Blockchain Developer to Create Your Cryptocurrency
A blockchain development company can be hired by you to create a new token or currency. These enterprises are called blockchain-as-a-service (or BaaS) companies that function to develop and maintain cryptocurrencies and blockchain networks. While some of these companies create customised blockchains others may use their own blockchain infrastructure that is already in existence.
By creating your own cryptocurrency, you are entitled to customise it as you see fit and, in the process, you get to learn more about blockchain technology. Further, your cryptocurrency stands the potential to gain value which can then potentially bring in rewards for you. That being said, you must ideally only pursue cryptocurrency creation provided you have sufficient technical knowledge or else have the funds to hire a BaaS company. It is important to bear in mind the fact that creating cryptocurrency can be time-consuming and is an expensive initiative as you need to constantly work on its ongoing maintenance such that it is successful.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.
Angel One Limited does not endorse investment and trade in crypto currencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.