As digitalization is occupying more and more industries, crypto payments are applied in many areas. A lot of people follow this trend and start thinking of developing their own currency. The reasons and purposes are different but the main is to get an extra income. In this article, we’ll describe 3 possible ways of creating a cryptocurrency and outline what you should do to make it profitable.
Coins or tokens?
To find the answer, let’s see how they are generated. There are 3 options:
- Build your own blockchain. It’s the most difficult way since it requires strong programming skills, plenty of time and a huge amount of money. You’ll get your own unique coin, but it has to be created by a team of experienced professionals to function properly.
- Modify an existing blockchain. You can find the open code on Github and make some changes to add new functions. Giving it a new name you’ll create a cryptocurrency, i.e. a coin with its own infrastructure. This option is easier but still requires an understanding of the code and its logic.
- Use the existing blockchain to create tokens. They can be used for any assets like tickets, coupons, loyalty points for shopping, etc. It’s the cheapest and fastest way since there is no need to develop a new system. It is also reliable because tokens are built on well-trusted platforms, for example, Ethereum.
So, the first two options mean the creation of cryptocurrency as a new coin with its own blockchain, while the third one implies using the existing platforms to build tokens. The last way is much cheaper and faster.
What’s the difference? Coins have their own infrastructure and are mainly used as a payment instrument to transfer wealth. Tokens are often managed with applications. You can use them to buy services, to show how many assets (e.g. GB for storing or free trials) are left, as shares of some ‘enterprise’ or bonus points. Coins are applied not only in their own network while tokens circulate in closed systems. If we compare them with real money, coins are like dollars that are accepted everywhere and tokens are like gift miles of an airline or casino chips.
The choice between them depends on the purpose and amount of resources you are ready to invest in. The examples of the most common coins are Bitcoin, Ethereum, Monero, NEO, and Ripple. Tokens are built on such platforms: Ethereum (the most popular), NEO, EOS, Qtum, Waves, BitShares, etc.
The key components of creating a cryptocurrency
If the aim of your project goes beyond entertainment or curiosity, developing a new currency will be only the first step to success. Like any other venture, it needs a well-thought-out plan that describes the main features and advantages for investors, as well as promotion opportunities. This is what you should consider before starting:
The Great Idea
Useless things never stay popular for a long time. That’s why think of the problems that your project will solve, e.g. removing agents like banks or lack of proper education. The industries where blockchain technology is actively used are Insurance, Data Storing, Medical Care, Marketing, Electricity and so on. Also, think of the future trends: what needs people will have, what will be interesting to them, what problems may arise in about two years. It will help your solution to stay afloat and withstand the competition.
The Dream Team
The creation of cryptocurrency is a specific area that’s why not every developer can cope with this task. Some platforms require even the knowledge of an extra programming language. Where to find good specialists? Try to visit conferences or exhibitions. They will help to stay informed about the latest trends and meet experienced professionals who are passionate about what they do.
Smart Contracts for Smart People
If you choose to build tokens, you need to set the rules according to which they will operate – smart contracts. They make transactions automatically based on the if-then statement or similar. It’s a great advantage since there is no third party, no human intervention and that’s why no cheating. The only stipulation is that the code must be correct, which is the responsibility of developers.
Any digital product needs to be protected against unauthorized access. Creating a cryptocurrency you create code. To prevent its breaking think of an external audit. It will help to find the weak spots in the code. After the verification, you’ll be able to claim that your solution is secure. People value safety when it comes to their money. That’s why professional audit will not only protect the investments but also add an advantage to your promotion campaign.
It’s a document that describes the project and explains the benefits. A whitepaper is a source of information for investors, that’s why pay attention to the content. Make sure they will find there the idea of your cryptocurrency, its relevance and practical use, the launch date and who is in your team. We would also recommend following the tips below when creating a cryptocurrency whitepaper:
- Use PDF format because it is supported by the major devices and systems.
- Write a full version for complete information and a short (2-8 pages) one for the key points.
- Check for grammar mistakes and typos or ask an editor to proofread it.
- Translate into a few languages.
Marketing and Promotion
If people don’t know about your product, they won’t buy it! Help them hear about the new currency and win their trust. This is how you can do it:
- Create a website with detailed information about the project and the team.
- Get closer to people via social media (forums, Facebook, LinkedIn, Twitter, etc.) posting news, updates and useful articles, running promotions, e.g. giveaways or special offers.
- Order an article on a well-respected website. It will raise both popularity and credibility.
- Place advertisements on target resources. Though blockchain products are under restriction now, there is still a possibility to do it.
- Ask for the review from opinion leaders and influencers in this industry.
- Send emails to your partners, investors and interested people with the updates and special offers.
- Create a place for your community to talk, exchange ideas or ask questions. Telegram messenger is the best option due to its security.
Need help with creating a cryptocurrency?
We are here to support you. Our team will do all the listed above work for you. ICODA specialists will analyze the project, do the technical part, e.g. write smart contracts, develop well-structured and informative whitepaper and provide the full cycle of marketing and promotion services. We are proud that we have helped more than 50 crypto-related products to become successful, profitable and popular.