If you are not an expert coder, but carefully watched Bitcoin’s development along with Dogecoin and other cryptocurrencies, then sooner or later you may question whether you can create your own cryptocurrency. In short, yes, you can. There are, however, many pitfalls that need to be studied before you plunge headlong into creating your own cryptocurrency.
What Is the Difference between a Token and a Coin?
First, it is important to understand the difference between coins and tokens. Both are cryptocurrencies, but coins (such as Bitcoin, Litecoin, and Dogecoin) work on their own blockchains, and tokens, such as Ether, live on top of the existing infrastructure they were built on. Blockchain is, in fact, a record of transactions protected by the network. Thus, the coins have their own independent transaction registers, and the tokens rely on the core network technology to verify and secure operations. As a result, coins are often used to directly transfer financial assets, while tokens have more functions, as they can act as a contract for almost anything from physical objects and event tickets to loyalty points.
Tokens are often issued through crowdsales, known as initial coin offerings (ICO) in exchange for existing coins, which in turn finance projects such as gaming platforms or digital wallets. You can get public tokens after the end of the ICO, as well as buy coins, using the base currency to make the purchase. Since now any person can create a token and run a crowdsale, ICOs are becoming more risky, because the creators often take the investors’ money and run, abandoning the project. The Securities and Exchange Commission (SEC) tries to control this process and seeks to use tokens as securities, which, like shares, will need to be regulated. The SEC warns investors about the purchase of tokens at ICOs without conducting preliminary research on their own. But, despite the fact that the crypto market is very volatile, experts believe that it will stabilize once more people accept its core idea. In general, the very idea of cryptocurrency is in the public domain, but this does not mean that it is easy to understand. Let us present the ways of creating your own coins or tokens.
Create Your Own Blockchain or Fork an Existing One
Both methods require quite a lot of technical knowledge or the help of an experienced developer. Since the coins are based on blockchains, you will either have to build your own blockchain, or take an existing one and tailor it to the new coin.
The first method will require serious programming skills, and even though there are already many teaching aids for step by step execution of this task, they assume a certain level of knowledge, and even if you do everything right, in the end you will not have a fully functioning coin.
Alternatively, you can tackle the fork of an existing blockchain by taking the open code that can be found, for example on Litecoin's Github, making some changes and launching a new blockchain with a new name. Again, this requires one to clearly identify the goals of the project and understand the code to know what needs to be changed and why. There are no universal technical solutions. Everything is very relative.
Using a Crypto Platform for Launching a Coin or Token
This option is most suitable for an ordinary person as all the technical work will be carried out by the platform. For example, CryptoLife actually creates the simplest of coins, and all one needs to do is enter the parameters, such as the logo and the number of coins received for signing a block. They even have prebuilt templates that only need a name and a symbol. The base price of this service is 0.25 BTC, for which one will receive the source code of the new coin in a few days.
WalletBuilders has a similar service with a price starting at 0.009 BTC, as well as a free trial version.
One can also create a token that is essentially a smart contract with or without a public ICO. Since tokens can represent any asset, one can even create a token that does not have any real value or serious purpose, except for exchanges between friends. It is faster, easier, and cheaper to build a coin because it does not take time and effort to develop and support a new or ramified blockchain. Instead, one relies on technology already used in Bitcoin or Ether.
If one wants to take one more step to creating a real value coin for a wider audience that can be acquired, bought, or sold but does not have programming experience, one probably needs the help of one or more developers. Even if one uses the service for creating a personal currency, it will need to be maintained, and that will not be cheap or safe.
The Technical Side Is Not as Terrible as It Is Made out to Be
The technical side of the creation of a cryptocurrency is not really the most difficult part of launching a successful crypto project. The biggest difficulty is in presenting the coin, its symbolic value, building the infrastructure, supporting it and persuading others to buy it. After all, even such memetic coins as Garlicoin, Dogecoin and PepeCoin have developers and user communities that support the stability of these projects. In addition, many cryptocurrencies are unsuccessful, even dubious, from a legal point of view, because no qualitative ICO was conducted or the coin failed to provide long-term interest. No wonder the term "shitcoin" was invented, and it seems it has no intention of fading. Therefore, before deciding on such a responsible step as launching one’s own cryptocurrency it is worth weighing the pros and cons several times over, determining the purpose of its creation, developing an action plan and conducting market analysis, so the currency does not devolve into yet another shitcoin.