Cryptocurrencies came into the limelight when Bitcoin’s value surprisingly soared high at the end of last year. Consumers and investors alike started taking a keen interest in cryptocurrencies while some considered to create their own. In this post, we will be highlighting some important tips on how to create a cryptocurrency.
Just like we use normal or fiat currencies to get what we want, a cryptocurrency is also used as a trade to obtain digital data. What sets cryptocurrency apart from the normal currencies is that it makes use of cryptography to keep the financial transactions secure and more reliable.
The value of Bitcoin may have plummeted from its strikingly impressive value but the demand for cryptocurrencies is still high. This indicates investors are still taking huge interest to explore the crypto market and are looking for ways to introduce their own coin on the blockchain platform.
Create Your Own Cryptocurrency
Several reports suggest that hundreds of new icons or tokens are trying to penetrate into the cryptocurrency market with some of them already in the planning phase to raise money with the help of a new method known as initial coin offering (ICO).
Just like most of the people, we are also curious to find out what it really takes to create your own cryptocurrency. Is creating your own cryptocurrency considered a tough job? Let’s find out.
As we dived deeper into this subject, we came to learn that creating your own cryptocurrency can be quite a complicated process which is also very time-consuming from the legal perspective. It is worth mentioning that this process also comes with a high rate of failure for both creators and investors.
As per the findings of a recent report, approximately half of last year’s ICOs could not be successful in raising enough funding or simply closed down their business after their inauguration.
Tips on How to Create a Cryptocurrency
It wouldn’t be wrong to say that the process of launching an ICO is quite similar to that of launching a start-up.
Majority of the newly launched cryptocurrencies are in fact utility-based coins or tokens that have not been designed to replace the traditional forms of currency such as fiat currency.
Consumers can use the utility coins to buy the products and services the company plans to offer in the future.
Moving forward to our main point of concern, what does it take to create your own cryptocurrency? We are hoping these important tips on how to create a cryptocurrency will guide you in a better way.
Hire an Expert Team
Before you decide to create your own cryptocurrency, you must focus on clearly defining the intended purpose behind the cryptocurrency to the potential investors and the Securities and Exchange Commission (SEC), which is Upcoming coins need to clearly communicate their intended purpose to potential investors as well as the Securities and Exchange Commission, which is gradually taking more interest in the ICOs.
The thing is, SEC is going to treat the new coin like any security. To begin with, you will be required to have a prospectus, download that information and let people see all the risks that come with it.
Above everything, you will be needing a team of professionals including expert advisors having abundant experience in marketing, high-profile investors giving necessary credibility to your project, and cryptocurrency industry insiders or just cryptocurrency enthusiasts.
Sell Your Coin
There are many coin offerings that utilize white papers to convey the agendas and goals of the coin to the potential investors. The contents of the white paper can vary from explaining major level problems and solutions to very intricate technical details describing the blockchain code that is being designed to support the coin on the blockchain platform.
Using the contents mentioned on the white paper, you are actually selling your coin to the potential investors.
Build Your Coin
Building a coin that garners attention and receives support in the crypto community is integral but it also needs to work.
Four important elements are required to have a robust platform that supports a good project. The first element would be speed, the second safety, the third scalability and the fourth simplicity.
Even though the majority of the newly-launched coins use existing platforms like Ethereum, each and every new coin requires its own supporting code that permits it to freely live and perform transactions on the blockchain.
To achieve a best supporting code, professional developers are required especially the ones having vast experience in the field of cryptocurrency.
Make Your Coin Legal
Regulatory authorities started taking notice as the cryptocurrency industry matured and grew over the last few months. The regulators stepped in to protect potential investors from any kind of fraud.
In fact, crypto community is not shying away from allowing the regulators to take involvement. They are being quite upfront with regards to their newly launched coin, its business model and how the coin will be used once it is issued to the public.