How to Make a Cryptocurrency? Well, to answer this question, you need to prepare the answer to a few more questions. That can help you create your cryptocurrency.
- What Coin do you Want (PoS or PoW)
- Do you want support for Smart Contract?
- The economics of your Cryptocurrency? (Including Rewards/Stake)
- Which Coin to Fork?
After answering the above four questions, you will be ready to make your Cryptocurrency. Just have to execute the below steps.
- Generate the Genesis Parameters?
- Setup the Nodes
- Setup Your Explorer
- Setup Your Mining Pool
- Build Your Desktop Wallet
How to Make a Cryptocurrency – Answers to 4 Important Questions!
As discussed earlier, we need to answer the four critical questions before making our Cryptocurrency. So let’s discuss them one by one in detail.
- What Cryptocurrency do you want to create (PoS or PoW)
- Primary they are two types of coins PoS (Proof of Stake) and PoW(Proof of Work).
- PoS coins offer rewards when the user stakes the Coin. The coin owner defines the percentage based on Coin Age and Number of Coins; the rewards are given. Only Coin Stakers have the right to approve the transaction in Pos Cryptocurrency. PoS coins are environmentally friendly since they don’t require high mining power.
- BSC, Polygon, Tron, and Reddcoin are an example of PoS Coin
- PoW Coins, on the other hand, give rewards the miners who generate the block. Often call as mining. Mining is a process that confirms the transaction. The More hash power you have more rewards you will earn. Many environmental and social activists have raised concerns over energy consumption in PoW coins. But PoW is more decentralized compared to PoS.
- Bitcoin, Ethereum (As of Now), and Litecoin are an example of PoW Coins.
- Do you want support for Smart Contract or Coin Like Bitcoin/Litecoin?
- Smart Contract, ERC20, and NFT are frequently associated with EVM(Ethereum Virtual Machine) Based Cryptocurrency. An example includes Polygon, ETH, BSC, TRON, and Many More.
- Cryptocurrency like Bitcoin/Litecoin is more of an asset like gold. They are primarily used for Trading.
- While Cryutpcourrency like ETH, BSC(EVM- Ethereum Virtual Machine) is used for facilitating Smart contracts. Smart Contracts implements any application like Duplicate/Fake Products Detection in Blockchain, ERC/BSC20 Standard Token, and NFT
- For Creating which support Smart Contract, I will suggest consulting some experience Company like Techaorha Solutions Private Limited.
- For creating Cryptocurrency like Bitcoin/litecoin, you can refer to this Udemy Course on How to Create Your Own Cryptocurrency.
- The economics of your Cryptocurrency? (Including Rewards/Stake)
- Economics means the number of coins (Total Coins), Coin Rewards, Staking Percentage, Coin Burning, and Halving Period.
- All this has to be predefined by the Founder of the Coin.
- For Bitcoin Ecomocis are
- Total Number of Coins: 21 Million (21,000,000)
- Coin Rewards: 50 Coins
- Coin Halving Period: 4 Years
- Staking Returns (N/A)
- Coin Burning: N/A
- For Every Coin, the Economics is different.
- If you want to plan the economics of your Coin, this Excel sheet will help you. Please Download the Coin Economics Planning Excel Sheet Here
- Which Coin to Fork?
- Every Cryptocurrency has different Hashing Alogirthim and Different Code Based. And in 99% per cent of the cases are built using various open source products.
- To Make your Cryptocurrency, you should fork an existing coin. Because it is challenging to invent every component of Coin.Especially the Military Graded Encryption Alogithim like SHA256 or Scrypt.
- The best Coin to fork for Simple Cryotucrrency is Litecoin or Bitcoin.
Well, once you have your version of the answer to the above four questions, it’s time to move into the technical details of making your Cryptocurrency.
Follow these Important Steps (Technical) To Make your Cryptocurrency
- Generate the Genesis Parameters?
- Genesis Parameters is the First Block of a Blockchain Network. So before you start marking your Cryptocurrency, you must generate the Genesis Block.
- Genesis Block depends upon the algorithm of the Coin. Many open-source python scripts and online Tool are available to generate the Genesis block.
- If you want to understand what GenesisBlock is in-depth, please refer to this Video on “What is Blockchain in Layman Langauge.”
- If you already understand the fundamentals of Genesis Block, you can use the Genesis Block Generation tool to create your Genesis Block File.
- Change the Code and Labelling
- I assume you are forking an existing coin to make your own Cryptocurrency. Consider an example of Litecion.
- The source code will have Litecoin All over it, including its symbol like LTC. But you dont want all this, your new Coin. So the only way out is to replace them with your New Coin Coin.
- Reference to “Litecoin,” “litecoin,” and “LTC” is in almost every file. A Cryptocurrency Developer needs to carefully replace them with the New Cryptocurrency Name and Cryptocurrency Ticker.
- Detail of Each File and Step is available in a Few courses. Suppose you are in the USA(United States of America), UK(United Kingdom), or any other country where Udemy is accessible. In that case, you can Enroll in this Course on How to Create your Cryptocurrency.
- Setup the Nodes
- When Blockchain is discussed, decentralization is the first thing that comes into mind. Well, Decentralization means the data is not in a single server/system. It is distributed over multiple networks.
- So, to make your own Cryptocurrency, you should have at least two Nodes set up (Two Servers). These nodes act as the first and second nodes.
- Every new user of your Cryptocurrency will set up a new node and will sync the data from the first two nodes.
- More nodes signify more decentralization and a robust blockchain network.
- Setup Your Explorer
- Explorer is the Face of your Cryptocurrency. If you are familiar with the Cryptocurrency Market and Transactions, then you must have visited these websites.
- blockchain.com
- etherscan.io
- bscscan.com
- Well, these are nothing but the explorers of the respective cryptocurrencies.
- When you make your own Cryptocurrency, it’s a must for you to create an Explorer.
- So that people can quickly check the status of the transaction on the network.
- Explorer is nothing but a list of all the transactions that happen over cryptocurrency networks, their status, and the number of confirmations.
- Explorer is the Face of your Cryptocurrency. If you are familiar with the Cryptocurrency Market and Transactions, then you must have visited these websites.
- Setup Your Mining Pool
- For PoW Cryptocurrency, Mining Pool is a must. It helps you to involve with the community.
- When the mining pool is ready, every community member pools his resource to mine your newly created Cryptocurrency.
- It also increases the hash power, which makes your cryptocurrency safe from 51% Attacks.
- When you set up your mining pool for your own Cryptocurrency, make sure you buy some excellent hardware. Otherwise, some people with suitable hardware will mine too much of your Coin. This will be a problem in exchange when they keep your coin dumping to reduce the pricing.
- Build Your Desktop Wallet
- Well, mostly, people build web wallets and mobile wallets. They are easy to access. But if you are not using the seed passphrase, then the user dont remain anonymous.
- He can be easily identified using his Email Address or Mobile Number used while creating the account in the web/mobile wallet of your Cryptocurrency.
- So when you make your own Cryptocurrency, make sure you launch the desktop wallet of your Cryptocurrency.
- Launching the desktop wallet of your Cryptocurrency is a very simple and cost-effective process. It doesn’t require API and Server to maintain the wallet.
- Creating Desktop Wallet for your Cryptocurrency is pretty simple, provided your source code is ready.
- Just visit this Material Page to create your own Cryptocurrency and then look for the section of build desktop wallet.
- You just have to download and execute the script, and your desktop wallet will be ready.
Well, I hope our detailed description of “How to Make Your Own Cryptocurrency” gave you some insight. But always remember creating Cryptocurrency is easy but taking it out in the market and building the community is the major challenge.
They are many success stories of newly created cryptocurrencies but also scams. It’s my personal request to all of you that when you make your own Cryptocurrency, make sure your intentions are good and it a backed by a solid business model.
If you are well versed in marketing and dont have a technical team, I will suggest hiring a company that can take care of the technical details of creating Cryptocurrency. You can refer to Techaroha.com. It’s a blockchain development company with ground staff present in Dubai, Abu Dhabi, the United States of America(USA), and London (UK). If you want to make your own Cryptocurrency, you can connect with them and get a quote.
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