How to create a cryptocurrency?
Cryptocurrencies have been growing in popularity and seem to have gone past the early adoption phase that new technologies experience. The world is moving towards a decentralized economy with over 1600 cryptocurrencies in the market.
It is now a billion-dollar market and is volatile, which can be corroborated by its 30-day gains and losses exceeding 100% on multiple occasions.
Analysts have predicted that cryptocurrencies could replace fiat in the coming decade. Now, you might be thinking that it’s a radical idea to create your own money in the form of cryptocurrency. Yes, you are right! This is a radical idea, but there are certain key considerations that one should keep in mind before making a cryptocurrency. In this article, we will learn how to make a cryptocurrency. But first, let’s understand some key terminologies.
Coin vs. Token
Though terms like “coin” and “token” might often be used interchangeably, there are some important differences between the two.
While a coin refers to a crypto asset running on its blockchain, a token runs on the blockchain of another crypto. Thus, a coin can also be referred to as a native token.
Bitcoin, Ethereum, Litecoin, and Monero are some well-known examples of coins. ERC20 and BEP2 standards operating on Ethereum and Binance blockchain, respectively, are good examples of tokens.
Generally, coins are generated by a process called mining, which involves several computers working to solve complex mathematical equations. Token, on the other hand, is offered through Initial Coin Offerings, where a company launches the token as a way to offer future rights to a product or service.