Want to learn how to make your own cryptocurrency? It’s not unheard of, and there are resources online showing how others have approached home-grown cryptocurrency. But there is a big difference between starting your own currency and creating your own token. That difference?
Creating a token uses someone else’s blockchain, whereas building your own cryptocurrency requires its’ own blockchain.
For the purposes of this article, we focus on creating a new currency rather than a token. That is a procedure we’ll examine in a future article. There are two basic issues standing in the way of some who are interested in learning how to make your own cryptocurrency; one is legal, one is technical.
We won’t waste column space here discussing that many startups attempting to do this fail due to a lack of funding or after getting initial funding (with a failure to raise more capital) but you should know this can be a factor, too.
Getting The Right Start
Starting a new cryptocurrency means asking the same questions that many app developers have to answer–what is the purpose of this currency and is it meeting a need or just reinventing the wheel? If you examine existing crypto options you will see many utilitarian offerings. And by that, we mean coins that have some sort of utility such as being usable in an online gaming platform or as currency in an online store.
“Utility tokens” provide access in a similar way to loyalty reward programs or even frequent flyer miles. That sounds great to some, but more wary users want to know why they should invest time and money in “currency” that is not freely transferable like real money, checks, etc.
Communicating With The Rest Of The Industry
Developing your own cryptocurrency means having a technical team that knows how to build a crypto platform–that’s assumed. But in order for your cryptocurrency to have any real value, you will need interest from others, and those planning their own crypto offerings need to understand how to communicate to future investors and users.
If you don’t understand how your intended customer base uses crypto, what inspires them to get involved in new crypto offerings, and what creates trust among the community? You likely aren’t ready to go public with your virtual currency. You will need to learn how to sell to the online community, and you will need to learn any regulatory constraints that may apply to your work.
Keep It Legal
What kind of regulation? The Securities and Exchange Commission may have a say in what you do, and any time you become involved in interstate commerce you will need to know your legal responsibilities for customer fulfillment, dispute resolution, and other matters, especially when under investigation by the SEC. There is increased regulatory attention on the cryptocurrency industry and the federal government is keen to prevent scammers, hackers, and con artists at bay while allowing legal operations to continue their businesses.