The invention of cryptocurrency paved the way for a decentralized banking system. Bitcoin was the first cryptocurrency to be created in 2009, and thousands of other cryptocurrencies, known as altcoins, have since followed the suit.
With the global crypto market capitalization totaling over $800 Billion, businesses all over the world are now accepting various forms of cryptocurrency in exchange for goods and services.
But what actually is a cryptocurrency and the numerous benefits it offers? How can one build their own cryptocurrency?
Being a leading crypto coin development company, we’ll show you a detailed step-by-step guide on how to create your own cryptocurrency.
Before that, let’s start with what is cryptocurrency and how it works!
What is Cryptocurrency?
A cryptocurrency (also known as crypto) is a decentralized digital currency designed to work as a medium of exchange. These are based on blockchain technology, a distributed ledger enforced by a distributed network of computers.
There is no central body in charge of issuing or regulating cryptocurrencies.
It’s basically a digital payment system that does not rely on banks to verify transactions. As a peer-to-peer system, Bitcoin enables payments to be sent and received by anyone, anywhere.
Payments made using cryptocurrencies only exist as digital entries to an online database describing specific transactions, not as actual physical currency that is carried about and exchanged in the real world.
Now let’s talk about what is Cryptocurrency Development?
Cryptocurrency development can be categorized into — coin or token creation.
Although both are cryptocurrencies, there is one fundamental difference!
While a token functions on top of an existing blockchain, a coin runs on its own. For instance, while the names Bitcoin and Litecoin suggest that they are coins, Ether and Uniswap are tokens that operate on the Ethereum network.
How does cryptocurrency work?
Since governments, central banks, or other financial entities do not control cryptocurrency, it is said to be decentralized.
Instead, it operates on a peer-to-peer network, with transactions recorded on a public ledger using blockchain technology.
A blockchain is a decentralized transaction ledger that is kept up-to-date via a computer network and that can never be concealed; it can be read at any time by anyone.
Cryptocurrency works by writing blocks and recording transactions to the ledger i.e transactions can’t be faked or overwritten.
The ledger is a database that is – Public, available 24*7 and not controlled by any central bank or government
This public ledger records transactions, but it does not contain information on the individuals trading cryptocurrency. Consequently, you maintain your anonymity, which may be part of their attractiveness.
It is nearly impossible to counterfeit cryptocurrency. The proper version of the public ledger must be “agreed” upon by all the machines that keep and update copies of the blockchain technology.
You obtain a private key when you purchase digital currency. This is a piece of code that permits outgoing transactions on the blockchain network so you can use the money.
Benefits of Cryptocurrency Development
Protection from inflation
Inflation has caused a slow decline in the value of several currencies. At the moment of their launch, almost all cryptocurrencies are given a hard and fast amount.
The ASCII computer file that details the quantity of each coin indicates that there are only 21 million Bitcoins in existence worldwide. As a result, as demand rises, its value will rise as well, helping to keep the market stable and, in the long run, preventing inflation.
Security and Privacy
For fiat currency transactions, privacy and security has always been an issue. However, the blockchain ledger is based on complex mathematical riddles that are challenging to crack.
Cryptocurrency is therefore safer than standard electronic transfers. They employ pseudonyms that are unrelated to any user accounts or stored data that might be linked to a profile for enhanced security and privacy.
Seamless Funds Transfer
The main advantages of cryptocurrency transfers are the fees and the speed. Cryptocurrencies enable instantaneous domestic and international transactions. It will be because there are only a few hurdles to overcome and the verification takes little time to complete.
Decentralized
The primary decentralized nature of bitcoins is a significant benefit. Many cryptocurrencies are controlled by the people who create them, by those who own a large portion of them, or by businesses that create them before they are made available on the market.
Contrary to fiat currencies, which are controlled by the government, cryptocurrencies are kept stable and secure by decentralization. This keeps the currency monopoly under control and free to operate. As a result, no organization can decide the flow and, consequently, the value of the coin.
24*7 Availability
One of the key benefits of such currency is that the market for digital currencies is always open. If you want to purchase, sell, or trade cryptocurrency, you don’t have to wait for the markets to open.
Your favorite digital assets can be traded on an open market at all times. It enables the company to carry out transactions at any hour of the day.
How to Build Your Cryptocurrency in 2023
Clear Your Vision
The first step towards creating your cryptocurrency is to clear your vision. Here are the 2 questions you must ask yourself – why are you creating your token? Is that token for business purposes or some other?
There are many types of tokens available in the market like Utility Token, MemeToken, GovernenceToken, StableCoin, etc. Each token has there own features like mintable, burnable, and pausable
- Mintable – Allow the owner to mint more tokens.
- Burnable – Allow the owner to burn/destroy tokens.
- Pausable – Allow the owner to pause the supply of tokens.
Thus, for creating your own cryptocurrency/token you need a strong vision that describes the type of token.
Once your vision is clear, you can start building crypto tokens with our TokenMaker
Or, you can create your cryptocurrency with the help of the open zeppelin library.
Design a Consensus Mechanism
After deciding to create a token, you must select a blockchain platform on which it will be built. A consensus mechanism is a technique that allows computer network nodes to agree on the authenticity of transactions in order to help protect the network.
Proof of work (PoW) and proof of stake are the two most frequent consensus procedures (PoS). They differ in a variety of ways, as illustrated below:
The most prevalent sort of consensus technique is proof of work. It is the system that Bitcoin and the majority of other cryptocurrencies rely on. In a PoW system, miners compete with one another to verify transactions and add blocks to the network.A miner is compensated with cryptocurrency for adding a block to the network.
On the other side, with proof-of-stake, miners are not compelled to compete with one another. To validate transactions, the system instead relies on validators who stake their bitcoin. The value of a validator’s vote increases with the amount of cryptocurrency they have staked. PoS has the advantage of being far more energy-efficient than PoW.
Choose a Blockchain Platform
Whatever method you choose to use to create a cryptocurrency, you must have a blockchain.
Public, private, hybrid, and consortium blockchains are the four basic varieties. Check out each’s specifics below:
Most likely, Ethereum will be chosen because of its smart contract features and ease of DApp development. There are, however, other popular options to explore.
Create the Nodes
Nodes are often quick computers that join a blockchain network in order to process and validate transactions. Nodes record and share data that is eventually added to the digital ledger while maintaining the currency.
Keep in mind that building a node from scratch requires considerable technical knowledge. The majority of blockchains already have a node structure that is used to verify transactions.
Decide a Blockchain Architecture
You design the internal operations of the infrastructure for your coin during this phase. How will the network of your coin work? This considers elements like the network protocol, consensus algorithm, and transaction format. There is no turning back once the mainnet launches, and many changes are irreversible.
Because of this, it’s customary to pilot new ideas on a testnet first. This could involve anything as straightforward as the address format used by the cryptocurrency or something more involved like integrating the inter-blockchain communication (IBC) protocol to enable communication between blockchains.
Establish APIs
The security and privacy of your coin are significantly enhanced by the integration of an API. The blockchain is also made collaborative by APIs, particularly when doing transactions. Additionally, certain third-party blockchain API suppliers can assist with this phase.
Design the Interface
If users find a cryptocurrency too difficult to use, there is no value in developing it. Have a user-friendly interface for your cryptocurrency. Remember that cryptocurrency is a complicated subject. People are therefore looking for an easy-to-use interface for their cryptocurrency transactions.
Make the Cryptocurrency Legal
Before introducing a new coin, it would be a good idea to research the laws and regulations governing securities offerings and related topics. Given the complexity of the issues and their continual updates, you could consider seeking the assistance of a lawyer knowledgeable in the area to help you with this step. This last step was overlooked by many persons who established or promoted ICOs in 2017 and 2018, which led to issues.
Because cryptocurrencies were still somewhat of a legal grey area at the time, it’s possible that they were unaware that creating or promoting new coins may lead to penalties or even criminal charges, depending on the situation.
How to Create Your Own Crypto Token Using a Smart Contract
Simple blockchain-based programs called “smart contracts” that execute when certain criteria are met. Usually, they automate the execution of a contract so that all parties can be certain of the outcome right away, without the need for an intermediary or a delay. They can also automate a workflow, starting the subsequent step when certain criteria are satisfied.
To create this smart contract we are going to make use of a tool called truffle.
| npm install -g truffle |
Once you install the tool, You can create a blank contract using the command
| truffle init |
Let’s build our first contract right away in the contracts folder.
We require this base implementation because we are building a contract for a token that is based on the ERC-20 contract. On Github, this is accessible under the OpenZeppelin Contracts.
Let’s build our first contract right away in the contracts folder.
So let’s use the following command to install this.
| npm install @openzeppelin/contracts |
Solidity is the language that is used to create smart contracts, and their files end in.sol. Let’s expand the ERC-20 contract to produce our own contract named BTBToken.
| // SPDX-License-Identifier: MIT |
| pragma solidity ^0.8.9; import “@openzeppelin/contracts/token/ERC20/ERC20.sol”; contract BlocktechBrew is ERC20 { constructor() ERC20(“BlocktechBrew”, “BTB”) { _mint(msg.sender, 200 * 10 ** decimals()); } } |
It’s a simple contract that only extends the ERC-20 contract and asks for the name and symbol of the token we’re creating.
With this, let’s compile this with truffle.
| Truffle compile |
Afterward, based on the version specified in the truffle-config.js, this will fetch the sole command.
Let’s now deploy this on the Ethereum blockchain.
Configure a Local Blockchain Network
Instead of applying the actual Ethereum network, we will operate our own blockchain network on our system using an application called Ganache.
Select the quick start option when you launch the tool after downloading it for your platform. A Blockchain network with a few accounts will be created as a result.
An RPC server will be available on the network at “http://localhost:7545”. Adding the following configuration to the truffle-config.js file will enable Truffle to connect to this network.
The contract we generated will now be deployed on the Ethereum Blockchain network. Let’s create a migration script to do this.
Deploying the Smart Contract to the Blockchain
To deploy the Smart Contract, we need to create a migration solidity file. Under the migrations folder, we will use the existing 1_initial_migration.js and add the following code to it.
| const BTBToken= artifacts.require(‘BTBToken’) module.exports = async function (deployer) { await deployer.deploy(BTBToken) const BTBToken= awaitBTBToken.deployed() // Now Minting 200 BTBToken for the first account await BTBToken.mint(‘0x55a52adD07D7c3417F7047D884920c3739cf1F60’, ‘200000000000000000000’) } |
Following the contract’s deployment, 200 tokens will be created for the specified account.
With this let’s deploy the smart contract with the following command.
| truffle migrate |
As soon as it is depolyed, you will receive the blockchain network address where the contract was activated, as displayed in the output below.
Now add this cryptocurrency to metamask with contract address
Why Choose Cryptocurrency Development with Blocktech Brew?
Being a leading cryptocurrency development company, Blocktech Brew has a team of elite blockchain developers.
As a top-tier crypto coin development company, we assist you in creating and launching powerful crypto coins. From its conceptualization, creation, and deployment, our developers master every step to take your business on a journey to success.
Let’s connect to build your own cryptocurrency today!
I am the CEO and founder of Blocktech Brew, a team of blockchain and Web 3.0 experts who are helping businesses adopt, implement and integrate blockchain solutions to achieve business excellence. Having successfully delivered 1000+ projects to clients across 150+ countries, our team is dedicated to designing and developing smart solutions to scale your business growth. We are focused on harnessing the power of Web 3.0 technologies to offer world-class blockchain, NFT, Metaverse, Defi, and Crypto development services to businesses to help them achieve their goals.
