There are various forms of money in this world like cash money, money obtained through online mediums, digital money and plastic money which refers to credit cards and debit cards.
Since last decade, the whole world has seen the evolution of a new form of money known as a cryptocurrency. Cryptocurrencies (virtual currencies) are digital assets which can be used as a means for exchange.
In this article, we will demonstrate in simple steps, how to create a cryptocurrency. It is always important to know that the cryptocurrency functions on the digital domain.
Digital currency is ‘mined’ by users. The entire value of the currency depends on user involvement, and it cannot be controlled or directed by the federal government, which is the reason that makes the cryptocurrencies unpredictable and risky.
What is the Tech behind the Cryptocurrency?
There is a lot of hype surrounding Bitcoin, which is the main reason for a huge increase in demand for digital or virtual currencies. However, cryptocurrency is the result of the technology known as ‘Blockchain.’
The Blockchain is the technology that has emerged since 2007 which is revolutionizing the crypto industry. Blockchain technology is a network-based system which records the data and stores it in the form of blocks on the network. Each block contains information on various aspects like:
- User details – It holds personal information of the users entering into the transaction. It includes name, username, IP address, personal address etc.
- Transaction details – It maintains records of the product being transacted, the value of the transaction, quantity, and rate.
- Timestamp – It records the date and time when the block is built or accessed.
Since the information is transparent and decentralized, Blockchain development technology is also referred to as a ‘Distributed Public Ledger.’
Also Read: Inside the Crypto World’s Biggest Scandal
Creating your own Digital Currency
The cryptocurrency is not regulated by the government; you can build a crypto coin of your own without needing any government approvals. If you have any background knowledge in coding and programming will surely help, but one can still create cryptocurrency with less knowledge in coding and programming.
Do you want to know, how to create your own cryptocurrency? Let us follow the step-by-step procedure in detail.
1.) You have to define your source code
The source code is also known as a smart contract. A smart contract includes all the information about the digital currency. The source code is similar to the outline of a company. The nature of the coin or the purpose behind issuing this coin is included in the source code.
If the purpose behind creating the digital coin is well described, then it becomes easier to raise money with the Initial Coin Offering (ICO). For instance, there is a digital coin called S-coin which was issued to support skin care. Users could pay their doctors (who accept S-coin) for their services or as premium payment for future services. In this way, the users won’t have to pay actual cash for their treatments.
2.) Always define your currency
You should define your cryptocurrency; if you want to replicate a very popular currency, it is advisable to have some changes in your tokens. Any faults or loopholes of the original currency can be replaced by adding new features to the smart contract.
To make this exercise profitable, it is best to study Bitcoin to the core. The source code of Bitcoin is available on different websites and can be downloaded. You can design and build a new coin in your name and keep promoting it with further improvements.
3.) Initial Coin Offering (ICO)
The two steps are the most technical parts of designing your own digital currency. The first step helps in creating the architecture for the digital currency. The second explains to define the currency.
The third step involves, raising funds through the Initial Coin Offering or ICO and it is all about marketing your coin. The ICO process is totally dependent on building trust with the users. If you do not define the purpose of the coin, no one will fund your coin.
There are various digital coins in the market which failed to raise any funds, they were surely built on a good platform, but the coin definitions were not attractive to investors. Investors should never get the opinion that the promoters are raising funds for their own interests. You should offer investors a digital coin which meets their business interests.
4.) Promotion of your Digital Coin
This is the final and important step; you should market your digital coin in such a way that a number of the investors are drawn towards your digital coin. Satoshi Nakamoto was able to bring Bitcoin to such heights is mainly because of a well-timed and executed marketing strategy.
The only way your digital coin will be successful is only if you can come up with a wide marketing pitch. The coin must be suggestive of a low-risk investment which offers high value.
Your coin should describe a source which generates value for investors. Offering value to your digital coin is the only way to promote a token in the virtual currency space successfully.
We believe that this article will be useful to you. Follow these steps stringently, but try to get broader into the meaning of words and the process in general.