There are thousands of cryptocurrencies available on the market. You can buy, trade, or exchange various cryptos using large centralized cryptocurrency exchange platforms such as Binance, Coinbase, and Kraken, or you can trade directly—peer-to-peer—using a decentralized exchange such as Uniswap. The possibilities are endless since developer teams are constantly launching new cryptos and initial coin offerings (ICO) are happening all the time, launching new assets into the crypto market.
Startups, companies, crypto enthusiasts, and beginners alike are keen to launch their own cryptocurrency in hopes of utilizing advanced programming technology to gain financial benefits. You too can create your own, new cryptocurrency if you dedicate some of your time to learn the necessary skills, or hire an experienced professional. Let’s take a look at how cryptocurrencies work and what your options are if you want to start your own digital currency.
What Are Cryptocurrencies?
Before you can decide to create your own cryptocurrency, it is important to understand just what cryptos are and how they work. Traditional currencies, so-called fiat money like USD or EUR, exist physically in the form of paper bills and coins that can be carried in wallets or stored in banks and used with credit cards and debit cards.
Unlike fiat money, cryptocurrencies don’t physically exist and you can’t put your Bitcoin (BTC) or Ethereum (ETH) in your wallet and go to the store to spend it. You can’t even keep your cryptos in your bank account and use them with your bank cards. The only way to keep your crypto assets safe is to store them in a cryptocurrency wallet by storing your private keys which act as passwords to your funds. Cryptocurrencies don’t leave their native networks, called blockchains. They always stay on the blockchain but they change addresses as they change ownership during transactions.
One of the main advantages of cryptocurrencies over fiat money is that they aren’t controlled by any central authorities such as governments or central banks and that they use blockchain technology to change locations super fast, facilitating transfers in a matter of minutes or even seconds depending on the crypto at hand. Also, blockchain technology provides top-of-the-line security that makes transactions very safe and reliable.
Digital Cash: Cryptos Like Bitcoin
Bitcoin was the first cryptocurrency in the world when it was launched back in 2009, after the publication of the BTC white paper by Satoshi Nakamoto. The BTC whitepaper stated that the goal of this first digital currency was to give people around the world, regardless of location, a type of decentralized digital cash that can surpass all the limitations of bank transfers and government financial agencies.
Classic bank transfers can take hours and days. This is because when you transfer money through a bank, the transaction needs to go through a complex bureaucratic system with lots of paperwork and bank procedures. You can’t just send money as you please without explaining the source of that money and where it is going.
With BTC and similar cryptos that are focused on providing users with digital cash, there is no bureaucracy and transactions don’t require any paperwork or explaining. Individuals can send each other money worldwide in just a couple of minutes.
There are hundreds of crypto coins that are focused on digital cash services besides Bitcoin, such as Litecoin (LTC), Bitcoin Cash (BCH), Monero (XMR), and Ripple (XRP). All of these cryptos aim to give users a means of fast, uninterrupted, reliable, and secure money transfers and this type of cryptocurrency is very popular among average crypto users who want to get around all of the unnecessary hassles of bank transfers.
Smart Contract Functionalities: Cryptos Like Ethereum
Developers and programmers look to cryptocurrencies for far more functionalities than just digital cash and storing value. In 2015, the Ethereum (ETH) network was launched by programmer and crypto enthusiast Vitalik Buterin, with the aim of providing the crypto community with an open-source, decentralized, blockchain-based ecosystem, suitable both for financial transactions and for programming decentralized applications.
Ethereum introduced smart contracts to cryptocurrencies. Basically, these contracts are self-executing agreements between two parties that are written directly into programming code, which means they are fully automated and can’t be interrupted once they are set into motion. Smart contracts can be used in various industries from healthcare and finance to education and logistics.
Salaries and other payments can be automated by smart contracts. Complex data selection and processing in healthcare and education can be programmed with smart contracts to flawlessly work without human supervision. In logistics, whole supply chains can efficiently run using smart contracts to signal production facilities, transport units, and retailers and make the whole operation run smoothly.
Also, smart contracts can be used to create decentralized applications (DApps) which are web platforms that don’t use centralized technology of big data companies such as Google. DApps can be implemented in all the above-mentioned industries and the Ethereum blockchain enables programmers to create such apps using its native programming language Solidity and the Ethereum Virtual Machine (EVM).
These types of smart contract-based functionalities differentiate ETH from other digital cash-oriented cryptos like BTC. In the world of cryptocurrencies, assets like NEO or the Cardano (ADA) blockchain offer similar, smart contract utilities and present very attractive programming ecosystems for developers.
What Are the Benefits of Having Your Own Crypto?
Any business venture or startup that wants to have its own blockchain has to create a cryptocurrency in order to power network operations on their blockchain. This is how many cryptocurrencies start nowadays, as a form of powering mechanism for blockchain-based operations, especially if the chain has smart contract functionalities that can run complex programming operations.
If you are starting your own business in spheres such as finance, dropshipping, logistics, or any other service-oriented sector, blockchain technology can open numerous opportunities to make your business more efficient and profitable. Creating your own cryptocurrency for the web platform of your business is a move that isn’t risky, since you need a digital currency to power your blockchain, and at the same time it can be very profitable if your blockchain starts becoming popular.
An increasingly important benefit of cryptocurrencies is that they eliminate the risk of scams and fraud by using proof-of-work blockchain algorithms, which makes it easier for people to trust a cryptocurrency as a reliable medium of exchange and store of value. As the cryptocurrency market cap increases over the years, the number of people who adopt cryptos as a legitimate financial instrument is also growing and it isn’t too late to jump on this wagon with your own currency.
You can also use your own cryptocurrency to boost interactivity on your business platform or app by giving users an incentive to be active by rewarding them with crypto tokens for using your app.
Building Your Own Blockchain
There are various ways for creating your own cryptocurrency and building your own blockchain network is perhaps the most demanding one, but it also brings the most possibilities for creativity and future upgrades.
The most popular solution for entrepreneurs and startups is to hire some experienced blockchain developers and brief them in detail about your business, the functionalities you want from a blockchain network, and how you plan to use it. Creating a blockchain shouldn’t be a problem for a developer who knows their trade.
Once you have your own blockchain, launching your cryptocurrency is the logical next step before presenting your project to the public. If your idea is creative and innovative and your project offers some truly new options to the community, it is quite possible that your cryptocurrency could gain considerable popularity. However, this requires constant development of your currency and your business, with a dedicated developer team behind the project to ensure it is regularly updated. Cryptos that don’t have a supportive developer team doesn’t really have a chance to become successful.
Create a Coin or Token On One of the Popular Blockchains
A very popular alternative to creating your own blockchain is to simply make a coin or token that is based on one of the popular blockchain platforms such as Ethereum, IBM Blockchain, CoinList, or Hyperledger Fabric. You can utilize already existing blockchain platforms to build your own cryptocurrency, without the need for complex programming and coding skills.
Creating a cryptocurrency on an existing blockchain platform is far simpler than creating your blockchain from scratch, but it still requires some knowledge of how cryptocurrencies work, what are coins and what are tokens. There are also some very functional platforms such as Wallet Builders that can help you practice creating new crypto for free, and you can also use the crypto creation service with the paid option, which is great if you aren’t really acquainted with programming.
One of the most popular options for creating your own crypto on an existing blockchain is the use of the Ethereum ecosystem to power your cryptocurrency. Ethereum is very user-friendly for developers that want to utilize the smart contract functionalities of the network to create apps, web platforms, and new currencies in the form of ETH-based tokens.
The most popular Ethereum tokens use the ERC-20 standard which is a token standard based on smart contract functionalities and enables the creation of highly versatile crypto tokens.
Some of the most popular cryptos on the market are actually built on the ETH blockchain as ERC-20 tokens. Among them are cryptos like Binance Coin (BNB), the native cryptocurrency of Binance, one of the most popular crypto exchange platforms in the world. BNB enables special benefits such as lower exchange fees for Binance users. Some of the most popular stablecoins, whose value is tied to USD, are also ERC-20 tokens, such as Tether (USDT), and USD Coin (USDC).
Bitcoin Forks as an Option for Building Your Own Crypto
Another popular method for creating your own cryptocurrency, especially if you aren’t looking for smart contract functionalities but rather a currency that will work as digital cash for your web platform or app, is to create a Bitcoin fork.
Cryptocurrency forks are a method for creating new currencies based on an existing blockchain by changing parts of the source code and functionalities. When parts of the existing blockchain code are modified and new functionalities are added, the old chain is left behind and the blockchain is continued as a fork with different characteristics than the original blockchain.
The Bitcoin blockchain has hundreds of forks that were created throughout the years by parts of the community and independent developer teams that wanted to change some of the characteristics of Bitcoin. One of the most famous BTC forks is Bitcoin Cash (BCH) which was launched in 2017. The original BTC block size is 1MB per block and part of the community wanted to increase the block size to 8MB in order to facilitate larger amounts of transaction data per block. This is how BCH was created.
Other BTC forks include Bitcoin XT which was launched in 2014 and increased the number of transactions per second from 7 to 24 but the project died soon after its launch. Bitcoin Diamond was launched in 2017 and it had similar characteristics to BCH but it is far less popular, while ZCash managed to become a very popular BTC fork.
How to Make Your Own BTC Fork
If you want to create a cryptocurrency that is oriented on digital cash services then it’s a good idea to consider creating your own BTC fork. The Bitcoin blockchain provides top security and is a great platform to base your currency on. However, creating a BTC fork does require programming knowledge.
The easiest way to create a Bitcoin fork is to go to Github and download the BTC code to your PC. When you’ve downloaded the code, you have to reconfigure it and add all the custom characteristics you want your cryptocurrency to have. These modifications are for example transaction rates, block size and other functionalities that alter the way your cryptocurrency is different from the original BTC network.
In order to reconfigure the code you need to use some advanced programming knowledge so if you don’t know personally how to do it, it is a good idea to invest some funds in hiring an expert who will get all the code altering technicalities right. Once you’re done with this, you should publish your blockchain code on Github and start implementing your crypto into your business plan. It is recommended to publish some sort of white paper for your new coin and provide a website that will serve as an FAQ location for your currency so people can learn more about it. If you just create a BTC fork without any additional info, you can hardly expect that your asset will become popular.
A Few Words Before You Go…
Creating your own coin isn’t simple and it does require programming knowledge whichever path you choose, so it’s important to decide upfront whether you are going to try to do all the work yourself, or will you hire some professionals to solve the coding aspects.
In any case, having your own cryptocurrency is a powerful business tool in every line of work that aims to utilize innovative technologies such as blockchain. Decentralized technology, based on open-source code is becoming increasingly popular because of its huge versatility and broad use cases and the popularity of cryptocurrencies is constantly on the rise.
These are some of the basics about cryptocurrency creation if you want to use the huge potential of including a native cryptocurrency in your business endeavors.