How to create and launch a new cryptocurrency - A step-by-step guide

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Are you ready to dip your toes in the crypto ocean but wondering how to create a cryptocurrency? Whether you're an entrepreneur, investor, or developer, creating and launching a new cryptocurrency can be a lucrative and exciting opportunity. With the global cryptocurrency market expected to reach$73.01 billion by 2027, now is the time to get in on the action.

But where do you start? In this guide, we'll walk you through the steps of creating and launching your own cryptocurrency, from determining the purpose of your coin to understanding the legal considerations. So, let's dive in and discover how to create your own piece of the cryptocurrency pie!

 

Crypto Coin Vs Crypto Token

Before making your own cryptocurrency, it's important to understand the difference between a crypto coin and a crypto token. Even though people often use these terms interchangeably, they are not exactly the same thing. Crypto coins are a type of digital money that only work with a specific blockchain. Crypto tokens, on the other hand, are digital assets run by Decentralized Apps (dApps) and projects that run on top of an existing blockchain.

Coins are developed from scratch to operate as currency and are developed on their blockchain. They work in the same way as fiat currency does – acting as a store of value and medium of exchange.

Crypto tokens are digital assets that are programmed into smart contracts and used in DApps and platforms. These are built on already existing blockchains. ERC-20 tokens, for example, are developed on top of the Ethereum network. Tokens come in the form of gaming tokens, utility tokens, governance tokens, and NFTs.

Tokens are often easier to develop than coins since they are built on existing blockchains.

There are three ways to create a cryptocurrency. From most challenging to least challenging, they are:

- Developing a blockchain and cryptocurrency from scratch: You can build your own blockchain and create a native coin. This gives you the most creative freedom and control over your coin. However, you need the technical skill, money and time to invest.

- Modifying existing blockchain code: You may create cryptocurrency by modifying the source code of an existing blockchain, a process known as forking.

- Creating a cryptocurrency that runs on an existing blockchain: You can build your token on platforms such as Ethereum without coding.

 

How to create a cryptocurrency?

Here's a step-by-step guide to creating cryptocurrency.

 

Define the Purpose of Your Cryptocurrency

One of the first steps toward cryptocurrency success is finding a use that can entice people to adopt it. Traditional cryptocurrency uses include transferring money, storing wealth as an alternative asset, supporting smart contracts, verifying data, and managing assets more efficiently.

 

Establish a blockchain consensus mechanism

A blockchain is essentially a digital record that keeps track of all cryptocurrency transactions. However, not all transactions are valid and some may be fraudulent, so a screening process is necessary. This process is provided by a consensus mechanism in the blockchain world. Different platforms use different methods to validate transactions, called consensus mechanisms.

 

Consensus Mechanism

How it works

Advantages

Disadvantages

Proof of Work (PoW)

Miners solve complex mathematical puzzles to create blocks and are rewarded with cryptocurrency.

Secured by computational power and can prevent 51% attacks.

High energy consumption and low scalability.

Proof of Stake (PoS)

Miners hold and stake cryptocurrency to create blocks and are chosen randomly to validate transactions and get rewards.

Low energy consumption and high scalability.

Risk of centralization and potential for nothing at stake attack.

Delegated Proof of Stake (DPoS)

Token holders vote for specific validators to create blocks and get rewards.

High scalability and low energy consumption.

Centralized decision-making and potential for vote manipulation.

 

Choose a blockchain

Blockchain is the foundation of all cryptocurrencies. Once you have figured out which consensus mechanism to use, you can zero in on a blockchain that supports the consensus mechanism. For example, if you want to go with the PoS, you could choose Cardano or Avalanche.

Blockchains are classified into four types: public, private, hybrid, and consortium. Examine the specifics of each below: 

 

Type of Blockchain

Advantages

Disadvantages

Use Cases

Public

Decentralized

Scalability issues

Cryptocurrency, Supply Chain

Private

Increased security

Centralized control

Banking, Healthcare

Hybrid

Combines benefits

Complex to set up

Supply Chain, Identity Verification

Consortium

Increased security

Limited scalability

Banking, Trade Finance

 

Some of the popular blockchain platforms are:

- Ethereum

- Polygon

- Hyperledger Sawtooth

- IBM Blockchain

- Avalanche

- Tron

 

Set Up Network Nodes

Once you've selected a blockchain, next step is creating nodes in the blockchain.  Nodes are the devices that run a blockchain's software and validate transactions, like storing transaction histories and confirming payments. Understanding your node choices is key in making sure you create a cryptocurrency that is robust. Don't forget, for some node plans, you'll need quite a bit of tech know-how to set up from scratch. However, plenty of blockchains have node infrastructure ready to go. This makes setting up nodes a breeze.

 

Determine blockchain architecture and tokenomics

During this stage, you will plan the inner workings of your cryptocurrency's system. This includes determining how your cryptocurrency's network will function, such as the format of transactions, the network protocol, and the consensus algorithm.

If you create cryptocurrency on an existing blockchain, you can use its pre-existing structure. Most well-known blockchains have a permanent, tested, and decentralized encryption system.

You would also need to figure out the tokenomics at this point. It's important to consider how many coins you plan to create and the size of the circulating supply when creating your cryptocurrency.

It's important to find the right balance. Having too many coins in circulation can cause the coin to have a low value while having too few can make it too expensive for investors to buy.

 

Establish APIs

After developing the internal structure of your cryptocurrency; the next step is to add the application programming interfaces (APIs). APIs act as a communication link between the different nodes in the network and make the software user-friendly.

APIs play a vital role in maintaining the safety and confidentiality of your cryptocurrency. They also ensure collaboration within the blockchain, particularly when performing transactions.

When choosing an API, make sure it is compatible with your chosen blockchain. For example, if you're using a blockchain based on the Ethereum platform, you'll need to integrate the Ethereum API.

 

Create a Suitable Interface

Developers that want others to be able to engage with their crypto must think about the user interface (UI) and user experience (UX). The simpler the UI and UX, the easier it will be for customers and miners to set up their settings and manage their investments.

 

Understand the Legal Considerations

When creating a cryptocurrency, developers must be aware of the legal issues that come with it. They should research and comply with laws and regulations that apply to the cryptocurrency's location and ensure it follows these laws. This includes understanding and following laws related to anti-money laundering (AML) and know-your-customer (KYC) and any taxes that may apply to transactions made with the cryptocurrency. It's also essential to consider any legal risks associated with using cryptocurrency.

 

How to launch a cryptocurrency?

Now that you have the cryptocurrency development sorted, you may wonder how to launch it. One option gaining popularity is an Initial DEX Offering (IDO). An Initial DEX Offering (IDO) is an innovative way to crowdsource funding for your crypto project.

In an Initial DEX Offering (IDO), token holders receive a reduced price on tokens when they are sold on exchanges.

IDOs are becoming increasingly popular among businesses and investors and are expected to become the main way of raising funds.

In an IDO, a Web3 project releases a token on a decentralized exchange (DEX) through IDO launchpads to raise funds from retail investors.

AdLunam offers a comprehensive and secure platform for conducting Initial DEX Offerings (IDOs). Along with the regular IDO launchpad service, the platform comprises a seed pad, and an Engage to Earn "Proof of Attention" model. In AdLunam, investors are allocated based on their Attention Rank. The Launchpad also allows upcoming projects to raise capital for their seed and private rounds.

With its user-friendly interface and advanced security features, AdLunam makes it easy for projects to launch their tokens and for investors to participate in IDOs.

Additionally, AdLunam's team has a strong track record of successfully launching and managing IDOs. Therefore, if you want a reliable and efficient choice while selecting IDO platforms, AdLunam would be an ideal choice.

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