Cryptocurrency is changing the way the world thinks about exchanging money thanks to several newly emerging technologies that work together. You’ll have to be a rather technical-minded person to start the process of creating your cryptocurrency. If you’re not, you should consider retaining the assistance of such a person to help you get the foundation for your cryptocurrency off the ground. Here’s a quick look at some of the basics for how to create a cryptocurrency.
Your first task in creating your cryptocurrency is deciding whether you want to create a Bitcoin fork or develop your cryptocurrency entirely. Several Bitcoin forks like Bitcoin Cash and Litecoin have been entirely successful on their own. Let’s take a look at some of the pros and cons of each approach.
Pros For Creating Your Own Blockchain
If you’re comfortable coding and want to create your cryptocurrency with specifications that you’ve designed, then this is the way to go. You can choose to use the proof-of-stake or proof-of-work platforms, the maximum block size, maximum coin supply, and the issue rate for new coins going forward. It’s the most comprehensive way to begin a new cryptocurrency, but it also the most in-depth and requires the most technical experience.
Pros For A Bitcoin Fork
Using the open source bitcoin to create a fork means you start with parameters that are baked into the bitcoin platform itself. There are some benefits to this, such as an established code base that comes with a secure blockchain that prevents double spending. You also save a lot of time and money since most of the heavy lifting is already done for you.
Dos & Don’ts of Cryptocurrency
When first starting out learning how to create a cryptocurrency, there are some important caveats to keep in mind. Your cryptocurrency will have to serve a unique purpose for it to be valuable to your consumers. No one will embrace a cryptocurrency whose worth they cannot assess just from the basic pitch. Consider what we know about successful cryptocurrencies like Bitcoin, Litecoin, and Ethereum.
Each of these cryptocurrencies serves a specific niche in the cryptocurrency market. Bitcoin is the gold-standard for the cryptocurrency, while Litecoin is a silver-standard. Ethereum was developed as a way to help software developers get paid for their continued effort in developing their programs.
No matter your reasons for wanting to learn how to create a cryptocurrency, be sure there is a viable market for it and that you’re entirely sure of its development method. You should run prototypes of the currency to show people how it will work and why it would be more efficient than the current money exchange process.
Moreover, you should have someone attempt some penetration testing on your network to determine if there are any weaknesses. You don’t want to go live with your service and immediately have all of your early investors assets lost through a hidden vulnerability that wasn’t caught in testing.
Finding Early Adopters
You’ll need a dedicated crew of early adopters that are willing to spend resources mining the coin you’ve created. Build trust with these early investors by sharing your vision with them and help them understand why it will be worth the cost to spend time mining your cryptocurrency over hundreds that are available on the market.
The altcoin world is much like the world of penny stock trading, where small-cap companies are all vying for significant attention from traders. You should make your cryptocurrency as attractive as possible to enthusiasts, who will help spread the word about your vision.
There are hundreds of different cryptocurrencies available on the market right now, but only a handful of them are successful enough to exist in the same sentence as Bitcoin. You should research each of these cryptocurrencies to see how they work, how they provide value to their users and their projected path into the future.
As previously mentioned, Ethereum aimed to be a way to pay software engineers for their continued work. Ripple is another cryptocurrency that hopes to take away the pain of transferring money through intermediaries by providing a blazing fast network that can process transactions in a matter of seconds.
Dash is an exciting cryptocurrency token because it hopes to change the way we think about advertising in the future. It is a resource that people use to pay out to web browsers who enable ads to support the sites they visit. They get money from the advertisers for viewing the ads.
The hardest part about learning how to create a cryptocurrency is managing to find a point where you can sustain it in the long run. Memecoins like Dogecoin, Nyancoin, and Coinye are bag holds for serious cryptocurrency investors. They don’t see it as providing a sustainable solution to a problem. On the contrary, as an inside joke among cryptocurrency traders and people who are looking to get rich quick.
These projects don’t get much development time. Plus, people can abandon it at the drop of a hat if the cryptocurrency ceases to be popular. The best example of this is Dogecoin. It barely cracked being worth more than $0.01 at the height of the Bitcoin explosion. It’s recommended to avoid your cryptocurrency becoming a Memecoin that serious investors overlook. As such, you should set out to solve a problem that none of the currently available currencies address.
The world of cryptocurrency technology is newly emerging. However, it is a cut-throat world in which each currency is competing against one another. They aim to become the next big thing. That means you’ll have to have a very clever interpretation for your cryptocurrency to be successful. Even so, it doesn’t mean it’s impossible.
The blockchain technology behind cryptocurrency is changing more than just the financial industry. Blockchain tokens could change the way we handle healthcare information, construction plans, and even shipping logistics. Looking beyond the financial world to find value for your cryptocurrency may be the next frontier. Overcome it by learning how to create a cryptocurrency in this highly competitive field.
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