Bitcoin was the first decentralized cryptocurrency. It was an enormous success, and the blockchain ecosystem is still expanding. Unfortunately, this does not guarantee that everyone’s attempts to create cryptocurrency will be wildly successful. Several companies that attempted an ICO failed to secure sufficient money or shut down after their launch.
You may effectively launch your coin by following this step-by-step tutorial on creating one.
1. Define Your Objectives
Please take a look at what you want your coin to do as a first step. Are you in favor of using it as a payment system? or an investment bank?
Please look at the issue your cryptocurrency will address that other cryptocurrencies do not. You can use this to develop your coin’s unique selling proposition (USP). For instance, Bitcoin was developed as a decentralized substitute for fiat money. On the other hand, Ethereum was created as a platform for programmers to build decentralized apps.
After defining your goals, you must come up with a name and logo for your currency. You’ll also need to write a whitepaper and a website. The website ought to describe your money and how it functions. On the other side, the whitepaper will discuss your idea in greater detail.
Could you make sure your website and whitepaper are both crystconcise, succinct, and devoid of technical jargon? People will only invest in your project if they can comprehend what it’s aiming to accomplish.
2. Create a consensus-building process
The creation of a consensus mechanism is the next step. This is how the blockchain state will be agreed upon in your coin.
Consensus techniques primarily come in two flavors: proof-of-work (PoW) and proof-of-stake (PoS).
PoW: The most popular kind of consensus technique is proof-of-work. It is the platform used by Bitcoin and the majority of other cryptocurrencies. Miners compete in a PoW system to approve transactions and add blocks to the blockchain. Bitcoin is given to the miner who adds a block to the network.
PoS: On the other hand, miners are not required to compete under proof-of-stake. The system instead relies on validators who stake their bitcoin to validate transactions. The value of a validator’s vote increases with the amount of cryptocurrency they have staked. PoS has the advantage of being far more energy-efficient than PoW.
3. Choose a Blockchain Platform for cryptocurrency
You’ll need to select your blockchain platform once you’ve chosen the consensus method you’ll use.
The Bitcoin blockchain is the obvious solution if a PoW consensus mechanism is what you wish to employ. However, there are a variety of platforms available if you want to adopt PoS, like Ethereum, Cardano, and the quick EOS.
4. Create the Nodes
After deciding on a platform, you must download the necessary files and configure a node. A node is a machine that keeps a copy of the blockchain and supports transaction verification and relay.
You must join a mining pool if you are operating a PoW system. A mining pool is a collection of miners who cooperate to dig up blocks and split the spoils.
5. Generate a Wallet Address for your cryptocurrency
The best cryptocurrency wallet option must be used to generate a wallet address once your node has been configured. People will transfer money here to purchase your cryptocurrency.
You can create a wallet address using internet service or computer software.
6. Design the Internal Architecture
The internal architecture of your coin must be designed as the following step. This covers the consensus algorithm, network protocol, and transaction format.
It would help if you also choose how many coins you will produce. The supply of your coins is this.
Here, it’s crucial to create a balance. If you produce an excessive number of coins, their value is probably relatively low. However, if you produce too few, customers might only be able to purchase some of them.
7. Integrate the APIs
It would help if you integrated the APIs after creating the internal architecture of your cryptocurrency. Thanks to the API (Application Programming Interface), different software applications can connect with one another.
For instance, you’ll need to incorporate the Bitcoin API if you want to employ a PoW system. Your cryptocurrency will be able to communicate with the Bitcoin blockchain. The Ethereum API must be integrated if you want to use a PoS mechanism. Your coin will be able to communicate with the Ethereum blockchain. Here is a list of the best blockchain APIs.
You’re almost ready to launch your coin once you’ve integrated the APIs.
8. Make Your Cryptocurrency Legal
Making your cryptocurrency legal is the last step, and there are procedures for doing so. You can Createa business and obtain a license from the government for this.
Your cryptocurrency must also be registered with the Financial Crimes Enforcement Network (FinCEN). This US government organization is in charge of preventing terrorism and money laundering financing.
Once you’ve completed everything, kudos! Your cryptocurrency is prepared for launch!