But is it possible, and more importantly, as simple, to mint your own coin?
Making a cryptocurrency, at first, might seem like a daunting task that requires advanced technical knowledge and substantial resources. But, it may be easier than you thought. You will of course need a certain level of expertise about blockchains, but it will depend on what it is that you are creating – a token or coin?
Knowing this difference is crucial as it changes how you want to design your cryptocurrency.
Difference between coins and tokens
Tokens are built on pre-existing blockchain platforms. Instead of the complete network, they have a specific utility in their projects. One example of a token built on the ethereum network is PancakeSwap. PancakeSwap enables users to swap between cryptocurrency assets by tapping into user-generated liquidity pools. It does not have its own native blockchain. Instead, it relies on the ethereum blockchain for its functionality.
How does one mint coins and is the process different from minting tokens?
You can mint both cryptocurrency coins and tokens, but making a token is much easier than a coin. You will need to build a native blockchain platform from scratch to create a coin. While you have the option of copying the source code of bitcoin’s blockchain, you will still need to have extensive coding knowledge to add new variables in the code. You will also need to get new users on your blockchain, which is a hurdle in itself.
Creating a token is more feasible for anyone who is not extensively trained in coding. Also, you can leverage the popularity of the blockchain you are building the token on to attract users. The only caveat with this option is you won’t have complete control over all aspects of the token. You will still have multiple customisation options that you can harness. Many sites and tools available online allow you to mint your own tokens.
It is essential to know that both options will require dedication and technical knowledge. The most popular networks you can mint cryptocurrencies on are Binance Smart Chain (BSC) and ethereum. Both provide token standards that you can use to build your own cryptocurrency.
Things you need to do before designing your crypto
Cryptocurrencies have different roles and features. To start the process of creating your cryptocurrency, you need first to define its features and what role it’s going to play.
2. Define the tokenomics parameters
Tokenomics are the parameters that govern cryptocurrencies, like distribution method, initial price, and total supply.
3. Creating your own cryptocurrency
This will be a guide to making both tokens and coins, but some steps might be unnecessary if you create a token. So, without further ado, here is a step-by-step guide to making your own cryptocurrency.
4. Choose a blockchain platform
There are many popular blockchain platforms you can use. Binance Smart Chain (BSC) and ethereum are the most widely used to make cryptocurrencies and decentralised finance (DeFi) apps. If you are making a coin you will need to custom build a native blockchain.
5. Choose a consensus mechanism
This step is only valid if you are making your own blockchain, as the existing blockchain already has a consensus mechanism. A consensus mechanism defines how the transactions are verified and blocks added to the network. You will have the option of proof-of-work or proof-of-stake. Most blockchains now use proof-of-stake as they are more energy-efficient.
6. Designing nodes
This step will also be only applicable to coins. Designing nodes defines the functionality of your blockchain. For example, you have to decide if your blockchain will be public, private, or permissioned. If you want more control over your blockchain, you should run a private blockchain.
7. Design your blockchain’s internal architecture
In this step, you must decide on aspects like address format your blockchain will use, and other core concepts that will define your blockchain. Make your decisions carefully here, as you cannot change them after the blockchain is running.
8. Design the interface
You need to make sure that the interface you design is precise and easy to navigate for operators and miners.
9. Make sure your cryptocurrency abides by your country’s laws
If you are not sure about your country’s stance on the legality of creating cryptocurrencies, then take advice from legal experts. Check if you require permission from any authorities to distribute your crypto coin or token.
10. Mint your cryptocurrency
The exact method you use to mint your crypto will vary with the parameters of your tokenomics. Fixed supply tokens will be minted in one go through a smart contract, while coins like bitcoins are minted as miners validate new blocks in the chain.
This is just an overview of how to start making your own cryptocurrency. If you are an amateur and intend to make this a career, you should seek professional help from programmers, blockchain experts, and legal experts.
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