Have you ever wondered if you could build your cryptocurrency and how to go about it? Well, keep reading. We are going to show you how.
First, you need to understand what cryptocurrency is before you attempt to build your own. Cryptocurrency is decentralised digital money used over the internet. It is the same as fiat currency but on a digital platform.
Why would you want to build your cryptocurrency?
Some benefits include:
• Decentralisation and security
• Fast and unlimited transactions
• Low transaction fees
• Universal acceptance
• Transparency and anonymity
When creating a new cryptocurrency, you can choose to make either a coin or a token. The key difference between both is- a coin has its blockchain while tokens are built on a pre-existing network.
An example is Ether (ETH) coin which has the Ethereum blockchain, and the Pancake Swap token, CAKE which is on the Binance Smart Chain.
It is relatively easier to create a token than a coin. Creating a coin will require you to develop and successfully maintain a blockchain.
Now, let us get into how to create your new cryptocurrency:
- Know your use case: Define not only how to create a cryptocurrency, but what problem you want to solve and what audience it will target.
- Choose a Consensus Mechanism: Consensus mechanisms are the protocols that consider a particular transaction legitimate and add to the block.
- Pick a Blockchain Platform: The correct choice of a blockchain platform for your token depends on the consensus mechanism you’ve selected. A few examples of blockchain platforms include Ethereum, Binance Smart Chain, Waves (WAVES), Chain Core, BigChainDB, IBM Blockchain, Hyperledger Fabric, CoinList, Quorum, IOTA, e.t.c.
- Design The Nodes: You have to decide the workings and functionality of your blockchain and design the nodes accordingly.
- Establish Blockchain’s Internal Architecture: Be sure about all the aspects before the launch as you won’t be able to change several parameters of the blockchain after it’s launched and running.
- Integrate APIs: Some platforms don’t provide pre-built APIs so make sure yours does. If it doesn’t still no need to worry, there are several 3rd party blockchain API providers like ChromaWay, Gem, Colu, Bitcore, BlockCypher, and Tierion.
- Design The Interface: Building a world-class cryptocurrency is of no use if your interface is not good. You need to make sure that the web, FTP servers, and external databases are of the most recent and the front-end and back-end programming is done with the future upgrades in mind.
- Make Your Cryptocurrency Legal: Make sure that your cryptocurrency is prepared and abiding by the soon to become laws of international cryptocurrency regulations. This way your work is preserved and no sudden surprises can ruin your efforts in creating a new cryptocurrency.
You will also need to think about how your coin or token can provide value to others, and how to market it to others. While the benefits are numerous, the work required to create your own crypto is significant and we encourage that you go about it in the most cost-efficient way.