The BitCoin fever has reshaped the digital universe. Cryptocurrencies have become a planet-wide sensation. Mining crypto coins and get rich schemes are all over the news. People across the world, including business entities and even governments, cannot emphasize less about cryptocurrencies. A cryptocurrency is generally in the form of coin or a token. A token is like a coupon. Utility tokens are app coins that are given to the user. Users can use these tokens for purchasing products or services in the future. The process of mining creates coins and Tokens. This is all because of blockchain technology. That’s why blockchain application development companies are in demand right now.
It is quite common to hear about new virtual currency launches. It is extremely easy to buy or sell digital currencies. Many platforms help users in doing it. As a matter of fact, there are online platforms where you can create your own cryptocurrency. A new virtual currency can be issued by a process called as Initial Coin Offering or ICO. Even You can create one too by launching an ICO. You don’t need to have a coding background, nor do you need to own BitCoins. There are some websites which can help you make your own virtual currency in $5 to $10. All you need is access to a blockchain network like the Ethereum network.
This article gives you an insight on how you can create your own cryptocurrency. So here it goes;
Step 1: Define your Virtual Currency
The first step to creating a cryptocurrency is to start by defining your coin. Defining a coin is similar to creating a prospectus for a new company. How you define you coin determines how successfully the coin will raise funds. A coin is defined with the help of coded contracts. These contracts are also called as source code. There are four primary functionalities of the coin which are defined in the source code. These functions can are;
1. The initial number of coins that will be issued in the ICO process. This is can be viewed as the initial supply of coins
2. The name of the coin
3. The number of decimals in the coin
4. The symbol of the coin
Before creating the coin, the purpose of the coin must be clearly defined. This should be done to assure that the coin achieves a particular objective. Explaining the purpose also helps in marketing the coin in the crypto community. Investors and other coin enthusiasts closely monitor the crypto community. Some sources have reported that almost half of the coin launches in 2017 was a failure. In other words, these coin issues could not generate any revenue. So, defining your coin with a broad purpose is extremely important.
Step 2: Initial Coin Offering Process (ICO)
Some people highly misunderstands the Initial Coin offering process. The coin offering starts off with the source code or the coded contracts. You can use a blockchain network like ethereum for your crypto coin. The Ethereum Blockchain network is a decentralized and open source network which supports smart contract functionalities. Or this is the network where the source code of the coin is uploaded.
A coin issue will be successful only if it raises funds. Marketing in the crypto community will greatly assist in gathering investors to fund your coin. Every investor will look at the purpose of the coin during the Initial Coin Offering. This is the defining moment for any coin. A smart investor in the coin will always look for value. How you define the coin determines how much you get funded.
Unlike every other asset, coins and tokens do not offer any ownership rights. Cryptocoins only have value. Owing to this value they can easily be traded in the crypto exchanges. Likewise, Utility tokens are like coupons which may have value to some investors, but might not be worthwhile for other investors.
Step 3: White Papers
Many coin offerings use White Papers during the launch. These white papers are extremely long records with the specifics of the token. They include any graphics and mathematical calculation. These calculations specify the complexities of the tokens and how they will operate within the Blockchain network will be detailed in the White Papers.
Step 4: Legal Framework
The legality of the currency should also be kept in mind. The cryptocurrency space is highly unregulated. Many coin issues are not able to generate any funds in the ICO process. The federal government does not have much oversight on the crypto-coin market. The government cannot enforce investor safety requirements as it has in the stock exchanges. So the cryptocurrency space is under constant vigilance to monitor any fraudulent activities. So if you are planning to issue a new cryptocurrency, stay within the legalities of the digital currency market. The regulators should be kept aware of your coin. The investors in the community and the market should be given true and accurate information about the coin.