For the next ten years, it has been proposed that close to 70% of the new value that will be created in the global economy will be through business models that are digitally enabled. And since there has been a precedence of digital currencies boosting the online business world, experts have opined that the asset class has much to do during the aforementioned period.
It is on this ground the knowledge of how to create and operate your cryptocurrency is considered very useful. The truth is the creation and operation of cryptocurrency require adequate know-how, or at least committing the tasks to an experienced team. The work of this guide is to walk you through the fundamental and basic steps you need before embarking on the creation of your own cryptocurrency, including the technical, strategic, and technical parts,
To get started, here are the basic steps (or say outlines) that this guide will explain to bring you a thorough knowledge of what it takes to create your own cryptocurrency:
- Define the Coin and its value proposition.
- Define your budget
- Build a developer team
- Deploy a smart contract
- Request the External audit
- Put a Whitepaper together
- Create a marketing strategy.
However, before we dive into this outline, there are some salient points that need to be settled, because they will inform your perspective towards the journey you are about to start. One of them is the reason why you need to create your own cryptocurrency. And afterward, we will consider the difference between a token and a coin.
Why do you need your own Cryptocurrency?
There are various reasons for an individual to consider creating their own cryptocurrency, and also there are benefits to that decision. One of them is that if you are embarking on a project that needs to run its own blockchain, it is advisable to create a virtual currency alongside so that there will be a system of encouragement for the nodes that contribute to the processing power of the blockchain.
However, if all you want is to create a cryptocurrency without a specialized blockchain, your main reason might be to solve some faults discovered in other existing currencies so that you can be differentiated from the competition in the market. Some significant features you might consider integrating into your cryptocurrency are transaction anonymity, risk of fraud elimination, faster and cheaper transactions, and many others, depending on your interest.
The Actual Differences Between Tokens and Coins
Before pushing to be a stakeholder in the crypto space through crypto creation, you must understand that cryptocurrencies are in two basic forms, namely tokens and coins. However, you must decide which form you want your crypto project to take because it has a very huge influence on the future of the project, including the size of funds that need to be injected into the project.
Of course, both tokens and coins are called cryptocurrencies, but the latter – a coin (for example, Bitcoin and Litecoin) is a form of cryptocurrencies that operates its own blockchain, but a token is the form of crypto that is built on an existing blockchain like the Ethereum and Solana blockchain. By implication, creating a coin means you need to set up a blockchain first which can be a laborious, time-consuming, and expensive task. But on the other hand, creating a token can be a faster and cheaper option since all that is needed is to use an existing network and just modify it to fit the stand and value proposition of your currency.
Though the codes of most tokens are accessible easily through DevelopCoins and GitHub platforms, one will still need technical know-how in the process of creating a new token, or at least commit the technical part to the hands of some experienced developers. However, in the next section, we will dive into the most common ways of creating a token using the ERC-20 standard which is expected to be built on the Ethereum network.
But at this point, it is good to say that if you can’t develop all by yourself, or you consider your experience little compared to what is required, you might need to build a team of competent and experienced developers that can help you in the process of setting an actual cryptocurrency up.
The Process of Creating Your Own Cryptocurrency
Speaking generally, creating a cryptocurrency can be relatively simple and fast than expected as all that is required is just to copy codes and just employ some advanced coding skills to modify it either by yourself or the competent dev team you have put together. However, to approach this professionally, you must understand that there are some fundamental things that should be evaluated before claiming to have crypto.
But then, as one who has an interest in creating crypto, you must know that the process is technical and it will demand a lot of strategic thinking. You can really compare the process of creating a new token to the process of creating a startup. And first of all, the required process is to have a business plan.
Without much further ado, let’s dive into the preliminary steps that must be considered before kickstarting the process of creating a developing a cryptocurrency.
- Define your coin
To begin with, one of the basic things you must first consider is the definition and the value proposition of the digital coin you want to create. You must first establish the reason you really want to create crypto and what is the value proposition to everyone interested in using and engaging the coin. Is it that you want to create a replacement for a particular fiat currency, or do you just want to use your crypto as a utility asset?
You must define the exact problem you want to solve with the cryptocurrency you are creating because knowing the exact use of the cryptocurrency you are creating will help you in the process of tailoring it to become a useful coin, hence attracting the right kind of people that will contribute to the progress of the project. You must know that when your coin is meeting the set objective, it will be easier to market the project to the crypto community.
- Define your budget for the Project
While your motivation for creating a cryptocurrency should be your major driving factor, you cannot underestimate the role of finances in the success of the project. You must understand that the process of creating your own crypto means you are dealing with the different documentation and development, including other things like security audit, marketing, and legal counseling. And to this end, there must be a set budget for the project.
First, there will be a set capital to kickstart the project from scratch though it can be different depending on several factors like the country and region of establishment and the average local prices either for purchasing or hiring resource personnel.
Before getting started, you will need extensive market research for you to decide the approximate capital required for the project and also whether you have enough to fund it from start to finish or you will need to onboard investors.
- Build a competent developer team
No matter how applaudable the idea behind your crypto project is, you cannot work the execution phase by yourself. And just like it is in the traditional business world, developing a crypto project requires a different kind of experience because there are various building blocks of knowledge that the main creator (or founder) might not possess. It is to this end that it is advised that you build a reliable, professional, and skilled developer team which will help in materializing the ideas and also ease the execution phase.
One of the best ways to scout for the best hands out there is to actively participate in the blockchain community where you will position yourself to meet experienced specialists and also to build relevant relationships within the space. Also, you will get to discuss ideas and get feedback that will contribute to the success of the development process of your crypto project.
- Deploy a Smart Contract
After completing the initial phase of the development process, the more technical tasks will start surfacing and this one – deploying a smart contract (or in a laymen’s term, “launching the code”) is the first of them. This smart contract will allow the transactions and operations among two parties and also determine the agreement between them.
The implication of this is that a blockchain cannot run as expected without a smart contract as the nodes on the network will not be able to understand which operations, they should consider legitimate and add to the block on the blockchain.
It is the code/smart contract that controls the execution, and also works to make transactions traceable, irreversible and transparent, and this process doesn’t require a third party, external enforcement, or any central authority. Generally speaking, there is no need for any intermediary for the execution of the operations since the deployment of the smart contract is automatic and the code is verified by the network participants themselves. This allows the network to reduce its costs as well.
At this stage, setting the right rules for the smart contract is very important because the performance of the entire crypto project depends highly on them. Also, considering this stage as a technical one, you must understand that it requires specific technical knowledge and a very clear vision of what the operation of the crypto project will look like.
- Request an external audit
Although the smart contracts deployed are traceable and transparent, there is still a need to verify the codes and ensure that they are secure. It is to this end that every blockchain and cryptocurrency creator is advised that they should perform an external professional security audit on their project.
The basic truth is that there are some kinds of smart contracts and decentralized systems that are vulnerable to attacks and hacks. Hence, the importance of independent and professional audits on decentralized systems and smart contracts cannot be overemphasized.
The importance of this external audit is to investigate the codes and track the vulnerabilities and flaws and also propose viable solutions before the smart contracts are deployed publicly. The assurance that a blockchain system is working perfectly as intended does bring some level of legitimacy to the project.
- Write a White Paper
For every crypto project, a white paper is essential, because it is all you have to introduce your project to the crypto community. A white paper is an in-depth technical document of a crypto project that informs the crypto community and everyone interested of the problems the project is planning to solve, including a detailed explanation of the technology and method employed for execution. It is crafted to get users acquainted with the corresponding issue and also to help them understand while they decide on the project.
The white paper is used to answer some pertinent questions like what does the project does, why the solution is needed and how does it work, and it is the most effective content used in promoting the Initial Coin Offering (ICO) of cryptocurrency. The paper when crafted very well should focus on solutions and should include contents like:
- The market overview and comprehensive analysis of the project
- The description of the existing problem the project intends to solve.
iii. A comprehensive explanation of the project and the benefits for its users
- Description of the token and details of the distribution
- Realistic plans for fundraising and investor attraction
- Team unveiling
vii. Roadmap of the project
A standard and proper white paper should contain nothing less than 2,500 words, and the writing style should be academic. However, outside that, the standard format of the document should be PDF.
- Create a good marketing strategy
No matter the level of dexterity employed to execute the flawless crypto idea you have, there are high tendencies that it will get lost among other similar crypto projects since the competition in the decentralized crypto space is growing tougher each day.
It will be really hard to breakthrough and increase your network if no one gets to know about your crypto project and ultimately, it will be difficult to raise funds for the project during the ICO – Initial Coin Offering and also to attract investors. This is why it is very important to have a piercing marketing strategy that will help your project gain traction and attention while it grows and stand out.
Having a good marketing strategy attract the right buzz and hype to your crypto project, though it depends highly on your budget and audience. Below is the list of the marketing tools you can employ to create awareness about your project in the crypto space.
- Website
A website adds more credibility to your project. It helps your present some basic details to your audience even before they interact with the white paper of the project.
- Blogging
With the right blogging skills, you can drive the attention of the crypto community to your project. You can use an expert opinion to improve the awareness of your brand and get more organic traffic to your website.
iii. social media
For someone living in this 21st century, you need little or no persuasion before you use social media networks to drive attention to your project. Also, you can use platforms like Discord, Telegram, and Reddit to create a community where you engage your audience and help them interact.
- SEO
With SEO, you can boost the traffic going to your website through organic search results.
- Conference and Crypto Events
Another way to boost the awareness of your project is to attend events and network. You can also use this avenue to present your project to investors at the event.
- Public Relations
Contents like interviews, press releases, comments, and dispositions on some particular topics can also help your project get enough media awareness and attention.
Conclusion
Up to date, there are over a thousand tokens and coins available in the crypto market, and some of them are just acting as a booster to the crypto space. And since the space is becoming more popular, the importance of those crypto projects is growing as well.
Digital currencies have served different purposes in the crypto space like rewarding users or raising capital or even acting as a governance tool for voting on some decentralized network. But either way, the majority of them are created to solve a particular problem, and since the digitalization of finance is still in progress, certainly, there will still be more crypto projects in the future.
Though the process of creating a cryptocurrency is quite complex requiring specific technical knowledge, it is still not rocket science. Outside the coding part of the process, other processes to pay attention to include a financial plan, brand strategy, marketing, legal counseling, which makes it comparable with the process of creating a startup.