Last Updated on July 23, 2020
Cryptocurrency has become more popular worldwide with each passing day. You would have definitely heard about Bitcoin. Ethereum is probably the second most popular digital token. Other virtual currencies like Ripple, Dogecoin and different alternative versions of the Bitcoin are also gaining notoriety.
These digital currencies are available to users across the globe and investors can invest in any of the numerous cryptocurrencies. Some online sources cite that there are over 1300 cryptocurrencies worldwide.
It is a lucrative thought to create one of your own digital currency and attract investors. Wondering how to create one on your own. It is simple to make a currency for yourself. The only thing that is difficult is managing your virtual token. Let’s get started with the basics.
What you need at the inception
Before jumping aboard to the programming and mining, every issuer must have the basics in place. You will definitely need some amount of spare cash to fund the initial phases of the project. But there are other things as well that are essential for the creating a cryptocurrency.
The first thing to do is have a solid idea to support the cryptocoin. There is no sense in creating one just for the sake of doing it. It might seem like a good prospect to brag about it, but it still won’t have any value. It is bound to fail, sooner or later. A good idea will back the cryptocurrency with a purpose. After all, what good is a currency if it does not have a purpose?
Creating a successful coin is centered around gaining the trust of the online community. People will invest their money only if there is a certain level of trust. Building a community and have a good number of followers is essential.
Another thing that is needed, is some background in coding and programming. It is true that you can hire a talented coder or developer. But that does not add much value to your project if you are clueless about what happens behind the scenes. Every coin issuer must understand how the coding works, even if he is not a master at writing codes.
Now that we have established the basic things to know, let us see how to create a successful online medium of exchange.
Creating a Cryptocurrency: Getting to know the technology
Cryptocurrencies are entirely reliant on the Blockchain development technology. It provides the functional platform to store, access and validate all transactions and activities. Blockchain technology stores data in cryptographically secured blocks in a publicly distributed ledger form.
It is a decentralized network and users can access information from any of the nodes connected to the network. The data cannot be altered without validation from other users and the information is highly transparent. This functionality makes the Blockchain development technology ideal for creating and monitoring the virtual currency supply.
To get started on your own token, you need to have a Blockchain network to support it. The ideal solution is to build a network of your own. But this can seem to be a painstaking process. Alternatively, you can also use online platforms like NEO or Ethereum and creating a similar application which has its own virtual token. You can either start from scratch and build your own token or a coin. Or you can base your token on an existing trustworthy technology.
Just for clarity, Coin and Tokens are both cryptocurrencies. They are quite similar in most aspects. The major differentiating factor is that a coin is a part of a private blockchain. Whereas a token is a virtual currency that is already part of an existing blockchain network.
In other words, a private Blockchain will have only one Coin, but there can be multiple tokens embedded in a single Blockchain network. Ethereum is a highly recommended and popular blockchain development technology to build applications and tokens.
The Ethereum VS NEO Conflict
It is a dilemma to choose between Ethereum and NEO. Both are equally good and have excellent functionalities to support developers.
Ethereum is an excellent playing field for token miners. It was the first platform which offered this service publicly and is a highly trusted online source. The tokens built on the Ethereum network are referred to as the ERC-20 Tokens.
NEO is the second most popular platform in the crypto community. Even NEO has a dedicated number of followers who build applications using its blockchain network. It is second in popularity only to the Ethereum. NEO users receive a standard token called NEP-5.
2. Programming Language
NEO, on the other hand, has its own advantages. NEO supports already existing programming languages like C++, Java, and Python. This makes it more popular among coders. There is no necessity to learn a new programming language and developers can use the language that they are already familiar with.
Building a Coin VS Building a Token
Every cryptocurrency issuer must be clear on whether he/she wants to launch a coin or a token. Quite a lot of aspects of the project rely on this decision. Primarily, the cost factor. Since a coin needs its own Blockchain which must be developed from square one, it can be an expensive ordeal. Creating a complete blockchain can be a time-consuming affair. And of course, a team of ingenious developers and coders.
Or, you can choose otherwise and create a crypto token. This can be done by developing an app which works on an existing blockchain structure (like Ethereum or NEO). Creating a token also takes some time. It needs good coders and developers. And there are costs associated to it. However, it is comparatively much cheaper and easier than creating a crypto coin.
Initial Coin Offerings
The Initial Coin Offering process is a digital procedure like shares and bond issues in a stock market. Business units tend to go public by offering shares to investors through an Initial Public Offering. In other words, a company raises funds by offering ownership interests publicly to investors.
An Initial Coin Offering (ICO) is the way in which coin issuers raise money. However, in an ICO, an investor receives crypto tokens instead of company stocks. The ICO process can be immensely helpful to issuers. It not only helps in raising funds but can also help the issuer in covering costs associated with creating the virtual currency.
One can say that an Initial Coin Offering is successful only if it can raise money to cover the creation costs. And gaining investor trust is crucial for the success of an ICO. There should also be a strong team of skillful coders and developers.
The founders should have a roadmap in place which details the future of the project. The roadmap should also inform the investors about the founders plan to use the funds raised from the ICO. There are some more things that every founder should bear in mind for the ICO process. Some of the items on the list are
- What product or industry will the Blockchain support? How is it going to make an impact? Who would benefit from investing in the coin or token?
- Every founder needs a good development team. One must also be clear on the platform to be used. Whether the token will be ERC-20 or NEO-5
- The smart contract functionality should be well defined. The smart contracts have the feature to automatically settle the transactions with the crypto coins or tokens.
- A systems audit should be done by external auditors. This would assure founders and the investors that the system is tamper-proof and cannot be hacked.
- A White Paper in an ICO is like a company prospectus during a share issue. A white paper should be released with all the detailed specifics about the cryptocurrency
- An effective marketing strategy should be in place. This will ensure that more investors from the crypto community are mobilized. Marketing the currency in social media platforms is also an ideal way to attract more prospects.
Creating the Crypto: The development team
Let us look at how to create a crypto using the least amount of funding. Creating a token on an existing blockchain is the cheapest way to get it done. It is imperative to select the right development team to handle this process. So, the coding team should comprise of people you can trust and who will deliver a quality output.
After all, it is the developers and coders who are going to make a good idea into reality. The best deal would be to opt for coders who have previous experience with the Blockchain development technology. You can find such talented people in blockchain events and seminars and connecting with new people in the community.
Smart Contracts Functionality
Smart contracts are one of the astounding features of Blockchain 2.0. It is like the traditional contract, however, it in the digital format and is embedded in the codes. A smart contract is executed automatically in the Blockchain. The rules contained in the contract define the actions that must be taken.
Settlements and token transfers can be executed effortlessly by running a smart contract. There is no intermediary, or third party involved in the settlement process. This makes the smart contracts more efficient, less time consuming as well as reduces transaction costs. The automated codes tend to increase the level of trust among participants of your project.
Performing a Professional Audit
The entire virtual currency platform is based on network codes and smart contracts. No matter how efficient the coding team is, the network still must undergo a professional audit. Auditing the system by external professionals boosts the credibility of the system.
Certifying the authenticity of the codes and network security by professional auditors can do wonders for the project. Not just the investors, but the founders can also rest assured knowing that the system has been double checked.
After all, when money is involved, it is best to have additional assurances from professionals. Such audits are commonly called as ICO Security Audits. Security audits done by companies with a long history are more credible than others. It also adds a great amount of value to the project.
Creating a Whitepaper
A White paper forms the basis of every cryptocurrency. It outlines all the terms and conditions of the crypto issue. The investment decision of the investor depends entire on how well the white paper is written. Here are some guidelines to draft a good white paper.
- Draft the white paper in a PDF file format. This makes it easy to read. Also, pdf file format is supported in different systems and all the browsers. The format and layout problems are also eliminated.
- Every white paper needs to have two different versions. A regular white paper which typically spans between 20 to 100 pages. It details each clause and condition about the virtual currency. The second version is called a Litepaper. This is the shorter version and is generally between 2 to 8 pages. This is a summary which highlights the key aspects of the currency.
- Proofread the white paper to remove problems and mistakes. A lot of the terms are based on readers interpretation. So, a white paper must be free of grammatical and typo errors.
- It is recommended to release white papers in multiple languages. After all, there would be foreign investors in the community. Other than English, some other popular languages would be Spanish, Mandarin, Japanese and Korean. The more the better.
- A white paper should answer all the questions like
- What is your idea and how will your virtual coin help?
- When will the token launch take place?
- Exchanges where the coin will be listed and traded
- A background of founders of the project and a timeline for the entire project
Marketing the Coin Launch
Marketing the coin launch can be a meticulous process. The campaign should cover a wide range of audiences successfully. So, what are the tools to achieve the desired result.
1. Social media marketing
Social media marketing can get you a lot of traffic and potential investors. Platforms like Facebook, twitter, Instagram, snapchat and LinkedIn have a host of crypto enthusiasts.
2. Press and Print Media
Printing information about your cryptocurrency on print media and well-known news websites can also do wonders for the project. This adds to the currency’s credibility. This can also convince many skeptics to invest in in your virtual coin
3. Sponsored Content
Facebook ads and Google ads have banned ICO commercials. But it is possible to feature the ICO launch using sponsored content from Twitter and LinkedIn.
Blogging can disseminate a great deal of information effectively and quickly. You can use portals like medium or you can choose to create your own blog. Either way, the articles should convey the status and progress of the project.
5. Email Marketing
Always collect the email addresses of your supporters and community members. You can send out regular updates and information through the mail. Using E-mail marketing adds a personal touch to the campaign.