How cryptocurrency is created

Cryptocurrencies offer many opportunities to earn money. One of the most reliable can be called mining, however, it will require initial investments. A few more risky ways can be called active trading on the exchange or lending existing digital assets. However, even without initial capital, you can start earning – AirDrop cryptocurrency allows you to receive tokens for some actions or simply for registration.

The popularization of cryptocurrencies and other blockchain-based technologies has led to the attraction of more new users who want to earn in this field.

Of particular interest are ways to generate high income in a short period of time without large investments. Since in order to pull off such a scheme through trading or other tools requires knowledge and startup capital, most of which can be lost during the first attempts, beginners are thinking about creating their own cryptocurrency. This option seems like a gold mine, especially after reading the news and the explosive growth of unsecured shitcoins.

But how easy is it to create a cryptocurrency and get income from its sale?

What cryptocurrencies are created for

In order to create a cryptocurrency, you need a specific purpose. Without it, this process is useless and actually impossible, because, starting from the purpose, the type of asset and the method of its release will be chosen.

At the stage of choosing the purpose, enthusiasts who want to earn money by simply creating a currency and selling it to theoretical users are weeded out. Such a motive is unsustainable, as a useless cryptocurrency will be of no use to anyone. It can be created, but it will go nowhere.

There are cases when a cryptocurrency is created solely to generate revenue for the developers:

• fraudulent ICOs;
• shitcoins designed for hype.

The first option is illegal, as it is a fraud in the financial sector, and the second has a minimal chance of success and requires large investments.

Cryptocurrency should have a clear purpose and the resulting utility. In most cases, the asset is issued to ensure the operation of the project, that is, it performs some function. For example, it is used to pay commissions, purchases within the platform, staking or to participate in management.

The specifics of the project and the purpose of the cryptocurrency being created influence the choice of its type: token or coin.

Are token and coin creation the same thing?

Token and coin differ in the need to develop a native blockchain. You can use an existing token to issue a token. For example, Ethereum or Binance Smart Chain. This simplifies the creation process, but this approach will not work in all cases.

For projects with unique technologies, the creation of a new blockchain and the issuance of a coin is used, as this expands functionality and eliminates the need to depend on the limitations that might exist when working with someone else’s network.

Tokens are suitable for DeFi and blockchain games because in most cases they do not require the development of a native blockchain. Their operation is ensured thanks to already existing ones and unnecessary complications are not always needed. Also, using a proven network helps to increase user trust and security.

From a technical point of view, coins are much more complicated, take longer to create and require more investment, but projects can be more unique. Tokens are cheaper and easier to issue, but do not lend themselves to the same customization and have less potential for innovation.

Ways to create cryptocurrency

Token
The way to create a token depends on the blockchain that will be chosen. Right now, the most popular networks for issuing tokens are Binance Smart Chain, Ethereum, and Solana.

There are two main options: simple and more complex. In the first case, you can use a paid service, through which the parameters of the future token are selected. Generation of the smart contract code takes place without user intervention. In the second case, frameworks are used, through which the smart contract code is manually written. To simplify the process, you can take an existing smart contract as a basis and make adjustments to it.

Coin
There are two options for issuing a coin: a fork or a new blockchain. Both ways of creating a network are quite complex, both technically and in maintaining the network. Without programming skills, deploying a blockchain is unfeasible, so in their absence, you need to bring programmers on board.

It is also important to consider the factor of attracting users, as the network will not work without them.

What you need to consider before starting development

Before you start creating a cryptocurrency, you need to determine the nuances that will affect the future effectiveness of the coin or token, as well as ensure that there are no problems.

Functions
Since the cryptocurrency must be useful, before creating it, it is necessary to choose the functions that it will perform. Without a clear understanding of the future use, the mechanism of the smart contract may not be spelled out correctly.

Tokenomics
Tokenomics is the economic concept of cryptocurrency. It takes into account the total number of coins, the method of distribution, the price at the time of release, and the mechanisms that should influence demand. Without properly labeled tokenomics, the project will not attract investors, as they will not see the value in it.

Peculiarities of legislation
The legal framework concerning cryptocurrencies depends on the country and not all states recognize the legality of coins and tokens. It is important to take this into account before starting development, as in the future a project that is outside the legal legal framework may face problems from state regulators.

Stages of cryptocurrency creation

Determination of needs and functionality
First of all, you need to choose the type of cryptocurrency: token or coin. As mentioned earlier: the difference lies in the need for blockchain development.

Next comes the assessment of the necessary functions and the mechanism of operation of the cryptocurrency. From this depends on what criteria will be used to select a blockchain platform or prescribe the code of a native blockchain.

Choosing a blockchain or developing from scratch
If you need to create a token, you will be faced with a choice between different platforms. It is important to evaluate their functionality and features to determine which one is more suitable. When developing your own network, you can also build on existing options and take one as a basis for a fork, or analyze future competitors to create a unique blockchain.

Building a blockchain

Developing your own network requires more knowledge and organizing a team, as doing such work alone is an extremely difficult task.

The main steps in creating a blockchain include:

• defining a consensus algorithm;
• building the architecture;
• code development;
• auditing;
• testing the network’s performance;
• blockchain launch;
• regulatory compliance testing.

Minting

The cryptocurrency generation stage comes whether you are creating a token or a coin. It is required to issue the cryptocurrency and sell it later.

After minting, the cryptocurrency goes to the wallet of the creator. From that moment, it can be sold and sent to other wallets that support the necessary standard.

Tokensales are used to realize the created assets. For the further development of the project and popularization of cryptocurrency, an important stage is the listing on the exchange. Without it, holders will not actually be able to use the purchased asset, as there will be only personal sale to other people with sending to their cryptocurrency wallets.

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