Are you looking to do the own cryptocurrency development?
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In over a decade of the existence of the cryptocurrency industry, more than 4000 new coins have appeared on the market and this number is growing daily because everyone can create a new altcoin. In this article, we’ll tell you everything you need to know to create your own cryptocurrency.
1. Knowledge of laws
Cryptocurrency legality in different countries: green — legal, orange — neutral, light pink — restricted, deep pink — illegal, gray — no information. Source
Virtual money is difficult to control and it’s blowing up states’ monopoly on money emission and management. For this reason, relationships between governments and cryptocurrencies
have always been strained. In some countries, this has led to a total or partial statutory ban on the purchase, possession, and trade of cryptocurrency assets.
Currently, cryptocurrencies are fully legal in 99 countries (of 246 or in 40%); 130 countries (53%) have yet to decide how they should treat virtual money and only 17 countries (7%) have restricted the use of cryptocurrencies.
If you want to create your own cryptocurrency, make sure that such activity is legal in your target market. Additionally, you should consider rules of cryptocurrency registration and taxation so that the cryptocurrency doesn’t get banned because of the violation of some rules like it happened to TON — Pavel Durov’s coin.
2. Project concept
. A few years ago when Bitcoin was worth less than $100 and the concept of virtual money was a novelty, any new cryptocurrency used to arouse great interest in the community. However, now there are so many tokens that the launch of another project might pass unnoticed, which usually leads to its failure.
To avoid such a thing, your cryptocurrency needs a unique value proposition – the reason why the coin is going to be bought and used. You have to think about how your project is going to help people, the sector, and/or the country. Are you planning to remove an intermediary (for instance, a bank or a broker)? To resolve sector problems (for example, corruption or inefficiency of logistical processes)? To lay the groundwork for the development of a new sector (for instance, a network of «Internet of Things»)?
. Once you’ve determined the main value of your project, you have to decide what type of cryptocurrency is the most suitable. This can be a traditional coin (Bitcoin, Ethereum) or stablecoins (Tether, USD Coin). You also need to determine whether it’s gonna be a decentralized or centralized coin; whether it’s gonna be a utility token
or a security token.
Categorization of all cryptocurrencies. Source
. A mechanism, under which the nodes included in the cryptocurrency network synchronize data in the chain of blocks and decide what blocks are «right», is called a consensus algorithm. Its purpose is to make all network nodes use the same data. Consequently, the consensus algorithm in the cryptocurrency network
does two things: it guarantees that the register data will be the same for all network nodes and prevents possible data fraud and manipulation by «bad» nodes.
Depending on the blockchain implementation, the consensus algorithm may have several variations. Here is the comparison of the most popular ones:
. It determines the logic and rules of action of the cryptocurrency system – starting with who can connect to the network and ending with the amount of remuneration for new block generation. All blockchain architectures are usually divided into three types:
3. Development company
If you’re not planning to develop a cryptocurrency on your own, you’ll need a strong company, which develops blockchains
and/or cryptocurrencies. Search for such a technical partner may take some time because the demand for blockchain developers is off the charts and the supply of qualified specialists still remains at a low level. Nevertheless, choosing the right team is crucial because cryptocurrency creation implies the work with big money and it has to be well secured against hacking and theft.
Where to look
. You can find a professional team of blockchain developers on such platforms as LinkedIn (Recruiter, Groups), Clutch, Goodfirms, Blocktribe, Toptal, Upwork, DREAM, Codementor, Xbtfreelancer, Cryptojobslist, Crypto.jobs, Blocktribe.com, Beincrypto.com, Coinality, BountyOne. In addition, you can find blockchain developers on Twitter, Facebook, StackExchange, and on Chinese Qzone, Renren, and Weibo.
What to pay attention to
. You can find thousands of companies, which develop blockchains and cryptocurrencies, on this market. You can use such criteria to understand which of them are worth paying attention to:
- Portfolio. Check candidates’ use cases for experience in working with blockchain and/or cryptocurrencies, presence of cases in the niche you’ve chosen (for example, finances, video games, logistics, health care), and for the correspondence between the initial task and the result achieved (quality of the created product).
- Comments and reviews. See what the clients, workers, press, and end users of the created product are writing about the development company. You can find reviews on Clutch, Goodfirms, and social networks.
- Developer’s location. The cost of hiring a developer will most likely depend on that. Besides, it also influences the convenience of communication (language, common working hours, etc.).
- Service cost. Usually, developers specify the cost of standard projects on their sites or offer to contact a manager and clarify the task in person for the manager to define the indicative budget.
- Legitimacy. The chosen company has to work in compliance with all local legislation rules so you should check its registration and other nuances. You can use such online platforms as WebChecker, GlassDoor, and BBB.com to check these things.
. After you choose a strong blockchain developer for the creation of your own cryptocurrency, your cooperation will probably take place in the following scenario:
4. Tech stack and API
- Agreement. You and the development company discuss the concept of cryptocurrency and specify the project’s tasks. Based on the information obtained, you create the project’s scope of work, clarify the project’s deadline and cost, and draw up a cooperation agreement.
- Platform design creation. UX/UI designers develop an information structure of a blockchain network, a wireframe, mockups, and prototypes of interface design of a future cryptocurrency platform.
- Direct coding. Frontend developers and backend developers bring the server side and system interface into the program code. Programmers also write smart contracts at this stage.
- Testing. QA specialists check the created software for errors and bugs, check the system work in all possible scenarios of load, and test the blockchain security.
- External audit of the project. Independent auditors must check your project’s work and logic so that it isn’t perceived as a scam. If you’re creating a stablecoin, auditors must check its backing as well.
- Deployment. When a cryptocurrency is ready, it’s added to listings of cryptocurrency exchanges (it usually costs $1000 to $10000). If you have a mobile wallet, it’s added to Google Play and App Store.
- Support. In parallel with the launch of the cryptocurrency, the work of the support service should be organized. It will be collecting feedback from users and help to solve their problems.
. In most cases, cryptocurrency software code is written in the most popular programming languages
Notwithstanding, this is only the developers’ preferences. Essentially, you can write the blockchain code in any language you like unless you’re creating a coin on the basis of the existing blockchain network. In this case, the chosen platform defines the tech stack. For instance, if you want to launch the cryptocurrency based on Ethereum, you will have to use the following resources:
Web, PC, App, and API.
Your cryptocurrency is going to be popular if its wallets work on all popular platforms: internet browsers, computers (Windows, macOS, Linux), mobile phones (Android, iOS). Tech stack depends on the blockchain, sector, and needed integrations. Here is an indicative list:
5. Marketing strategy
When you create your own coin, you’ll need a marketing strategy to build a partnership with external services such as cryptocurrency exchanges, online stores, banks, or online casinos. Including your cryptocurrency in their listings is your main task because the higher its penetration into the market relations is, the higher its value to ordinary people is.
Adding the coin in the listings of the cryptocurrency exchanges
usually requires either money (depending on the exchange, payment for a listing can be $1 to $50 thous.) or enough popularity of the cryptocurrency in the blockchain community. To promote your coin among ordinary people, look for channels that they use to communicate with each other. These include Telegram, Reddit, Discord, Twitter, BitcoinTalk. You can also publish press releases and use mass media to attract the audience and raise your brand awareness.