After looking at the success stories of Bitcoin, Ethereum, etc. many of you might want to build your own cryptocurrency. So this blog is an initial guide for all the beginners who wish to have their own cryptocurrency.
STEP 1: DECIDING THE TYPE OF CRYPTOCURRENCY
Now there are 2 types of cryptocurrencies:
COIN: This will have its own blockchain like Ethereum.
TOKEN: These use the blockchain or the backbone which are already built. For eg: TenX, EOS, etc. are all ERC20 tokens.
So, the first step which you need to consider is selecting which kind of cryptocurrency you wish to build. If you are electing to go with building a coin then you need to start from scratch and build your own blockchain which requires:
An amazing team of Cryptocurrency developers who are ace in coding
A lot of capital for initial investment as it is expensive
Also lots of time
While if you want to build your own token
You chose not to have your own blockchain and work on the previous build blockchain.
You only need to build an app which that runs on the existing blockchain.
The most successful token are build using Ethereum and then NEO. Building tokens also require a good team, money and time but are still easier than building a coin.
STEP 2: INITIAL COIN OFFERING (ICO)
Once a company is ready to go for a stock exchange it offers initial coin offerings (ICO) to gather funds for their crypto projects. An ICO is a way to raise funds by exchanging shares. Before launching an ICO there are some factors which should be followed or without which your company shall collapse:
The utility of coin or token: Look that does it actually have a need in your ecosystem and is it having a validity. Ask yourself a question that if this token is launched how it will benefit your company and will your company still exist.
Good team: Yes, you can build a token on existing blockchain but you still need a very good team to launch a token, to make sure the token is secure and also to evolve the technology.
Security: Understanding the security and the scalability of your token is a big issue to gain the faith of your investors. As you are a company who raises money then you are automatically a red target for hackers and you surely can’t let any such collapse to your company.
Business model: It is very important to understand that what are you selling and ask yourself that what are people hiring you for? And once you get the answers proceed accordingly.
STEP 3: THE IDEA BEHIND YOUR CRYPTO
If earning money is your focus then it should have a big idea to start. You need to understand how your coin/token will benefit the community and why people will want to invest in it. Will you be creating the dApp (Decentralized app) which is going to remove the bank or are you looking to solve community problems? Basically, know your central idea before starting the construction process.
STEP 4: THE DEVELOPMENT TEAM
You need to be very wise in having the best development team for changing your investments to profit. This is very important to give life to your idea and it is better to look into their experience in blockchain technology while hiring. You will be able to build a good team only when you have a good contact in the blockchain community. So, connect with people and create a good relationship with industries.
STEP 5: A SMART CONTRACT
A smart contract is a digital contract which runs on the blockchain, executes automatically and cannot be changed. In the smart contract, certain rules are written which it should follow. For example, 1 ETC = 100 tokens; so whenever a user sends 1 ETH smart contract automatically sends 100 tokens. So, a company according to its requirements decides the rules and codes the smart contract to serve its users.
STEP 6: A PROFESSIONAL AUDIT & WHITEPAPER
A professional audit is very important for the legitimacy of your project. So, it requires a questioning mind, being alert to situations which may indicate a possible error or fraud like being hacked, and a critical assessment of the evidence collected. You probably won’t build a currency that gets hacked; hence an audit is always important so that your users feel safe to invest.
Coming to the whitepaper, it is an authoritative and in-depth report on a specific topic which first presents a problem and provides a solution. So if you wish to build a good cryptocurrency it is very important that you know how to create a good white paper. If an ICO is not having a whitepaper then the company is not considered standardized and easily loses trust. So create your whitepaper wisely. Here is the guide to build your whitepaper.
STEP 7: PROMOTING YOUR ICO
This is the last and most important step for the success of your cryptocurrency. Some important platforms from which you will gain huge support are:
Press and media
Managing your community
This was the brief of creating a successful cryptocurrency which if created and nurtured with care will definitely make you earn huge profits. So what are you waiting to set an idea and get started!