How to create your own cryptocurrency in 7 steps – Cryptocurrency is one of the hottest buzzwords on the internet right now, and it’s no surprise why. In fact, if you’re not familiar with cryptocurrencies like Bitcoin, Litecoin, Ethereum and Ripple yet, you may be wondering what all the fuss is about. This comprehensive guide will teach you everything you need to know to start creating your own cryptocurrency as well as what makes cryptocurrencies like Bitcoin and Ethereum so revolutionary and potentially game-changing. Let’s get started!
How to Create Your Own Cryptocurrency in 7 Steps
Step 1 – Find an Idea
We’re sure that almost everyone will agree with us when we say: An idea is worth nothing if there is no execution. The first thing you need for a successful startup (in any field) are ideas, but it is essential that you find a topic that interests you so that you will have enough motivation to move forward and do whatever it takes until you achieve success.
So how can one even come up with an original idea? One method is brainstorming, where people come together and write down all their thoughts on a topic, then choose only those ideas which are really good. This can take many forms; some people form teams and others simply go alone.
If you want to come up with an idea for a new business, it’s important that you know that any business which is successful will ultimately be built on some kind of core value. What we mean by that is, if a potential customer doesn’t recognize or understand how a product or service solves their problem, then there’s no way they will make an investment.
Therefore, it can be helpful to ask yourself: Why do I believe my product is valuable? What makes it different from all others? Is there something unique about what I’m offering? One good technique is keeping a journal where you record ideas as they come along and write down thoughts related to them.
Step 2 – Make an Algorithm
If you’re creating a proof-of-work coin, you’ll need an algorithm. But first, you have to think of a unique feature for your coin and see if there is an existing algorithm that has it or if you have to write one from scratch. This feature will be used as input when generating hashes,
so depending on how complex it is, it can take some time to come up with something good. A popular feature that people use names: Bitcoin uses SHA256(Satoshi Nakamoto), Litecoin uses crypto (Litecoin), and Dogecoin uses script(in_development=True). Hash functions: Your proof-of-work algorithm will require a hash function.
The simplest hash function is just a one-way function that converts data of arbitrary size into a fixed-size output. This lets you store any amount of data in a hash, but it only works one way: you can’t convert back. The SHA256 used by Bitcoin, Litecoin, and Dogecoin are examples of such functions. A more sophisticated approach is to use something like the script, which was designed with memory-hardness considerations in mind.
Step 3 – Make it Virtual
What is money, really? It’s just a representation of value – a virtual token we can exchange for goods and services. Well, what if we took that one step further and created a currency based on information as opposed to physical goods? That’s exactly what cryptocurrencies like Bitcoin are: online currencies that use encryption technology not only to track transactions but also to control the creation of new units.
To make it virtual, set up an environment for users to trade with each other and mine (create) new tokens. Then regulate it so that some form of currency must be spent before creating more tokens. This mechanism encourages people to spend their coins instead of saving them, which keeps prices low.
Step 4 – Make it Valuable
There are two primary ways to make money with a cryptocurrency: mining and speculating. Mining is how Bitcoin originally made money, and though it’s gotten harder over time, it’s still quite feasible. It involves setting up a rig, or computer specifically designed for mining, which uses its processing power (or hash rate) to generate new coins as quickly as possible.
Mining isn’t as easy as it used to be, and there are other cryptocurrencies you can mine. The second option is buying coins and holding them. As they become more valuable over time, so do your holdings. The downside is that you don’t have an actual product or service attached to a coin as you do with mining. That means if something happens and its value drops dramatically, you could lose money instantly with no way of getting it back.
Step 5 – Get People Interested
Don’t go all-in and create a whole new currency without first asking for support, investors, or beta testers. The ICO (Initial Coin Offering) craze has exploded over 2017, but it’s not hard to see why many of these projects are vulnerable. In 2016, $257 million was raised by ICOs; by mid-July 2017 that number had already surpassed $1 billion—and that’s just a fraction of what will actually be invested before it is all said and done.
While some of these projects are legitimate, many of them are scams that will run off with investor funds. Even a few legitimate ICOs have proven vulnerable to hacking and fraud. If you’re going to launch an ICO or plan on investing in one, it’s critical that you do your research and vet any potential investment opportunities. Here are seven things you should look for when considering whether an ICO is a smart investment opportunity
Step 6 – Turn it into something Physical
Now that you’ve created a digital currency, you can turn it into something physical. Just as music is downloaded, movies are purchased online and books are bought from Amazon, you can sell your coin online at marketplaces like OpenBazaar. For an extra fee, some services will even take care of converting digital currencies into cold hard cash for you — but do be aware that if something goes wrong there’s often no way to get your money back. In other words, proceed with caution!
One of those marketplaces is Bittrex, which allows you to sell cryptocurrencies for other digital currencies or traditional currencies like dollars or euros. Like most exchanges, Bittrex charges a small fee for each transaction you make — but it’s still far cheaper than selling physical goods. At last check, Bittrex offers over 250 different cryptocurrencies. The platform also has an order book feature that lets you enter specific prices and quantities that buyers will have to meet in order for a trade to go through — so if you want someone to buy just 1 Nano token, don’t expect them to pay any more than a dollar per coin!
Step 7 – Keep Going!
At first, it may seem like nothing is happening as you move your currency from one blockchain address to another. Don’t worry—just remember that you’re creating a blockchain, which is a public record of all of your transactions.
There will be some hiccups along the way and you might find yourself stuck for a short period of time. If that happens, just keep going! Eventually, you’ll get enough confirmations and people using your currency that it will gain value. But don’t forget—if you want it to take off then make sure others know about it by starting a community around it or making sure other currencies are trading against yours so they have an incentive to start using it.
That’s all there is to it. It may seem like a lot of work, but after a while, you’ll be able to finish these steps in just a few minutes and then sit back and watch as people begin trading your currency. Be patient with yourself; no one has created their own blockchain overnight.
It can take some time before you see any results, but soon enough others will start paying attention and want in on what you’re doing—at which point things will get much easier for you! At that point, it may be time for you to join an existing project or even build another one from scratch. But for now, sit back and enjoy having created something new with blockchain technology!
Also Read: How to Start a Cryptocurrency Website in 5 Step
Conclusion
A step-by-step guide to creating your own cryptocurrency. Where do you begin? What should it look like? How much will it cost? We’ll walk you through all seven steps, explaining how each one is done and how much you should expect each step to cost. Ready? Let’s get started.
The first step is simple, and it’s an essential foundation for everything that follows. Decide on the name, symbol, and amount of currency you will distribute. Generally speaking, most cryptocurrencies today are identified by a symbol such as BTC, which stands for Bitcoin. The amount of currency available can vary from one or two to millions or even billions of units. It all depends on how much you’re willing to commit and how much activity you expect among users.
Do some research online for ideas about what people have done before, but remember that ultimately you’ll have only limited control over these things once your currency has launched. If possible, it’s best to keep them consistent with similar currencies already out there so people know exactly what they’re getting into when they choose yours over someone else’s.
