Nowadays, you can create cryptocurrency for your friends; for a club that you are a part of (for its members) or anything else. In its pure sense, it’s a currency created by the people, for the people!
If you look at the complexities involved in the production of an actual dollar bill, it will become evident why it’s not possible for every Tom, Dick and Harry to start printing his/her currency notes at home! However, as also mentioned above, if you are wondering how to create your own cryptocurrency, you will find it is a lot easier.
In fact, nowadays you can use certain tools to help you create one within a matter of few minutes. Although knowing a bit of coding helps, it’s no longer the only pre-requisite to get your digital currency going.
Let’s learn how to create your own cryptocurrency and then actually make it work!
Set Up and Nurture Your Cryptocurrency Around a Community
Whenever anyone mentions about creating a new cryptocurrency, the first obvious step may seem to be coding the coin. However, that’s not the ideal place to start. Instead, your first step should be to locate a community and then create your cryptocurrency around it.
You cannot expect to create some altcoin and then expect the whole world to show up and lap it up! The currency should be based on people’s requirements and hold some relevance to their background and culture.
For instance, Peter Bushnell created Feathercoin in April 2013, after he resigned as head of the IT department at Brasenose College, Oxford University. He intended to create a currency that could bring the focus back on the people.
It was in response to the lack of community inclusiveness and engagement he witnessed in the existing cryptocurrencies like bitcoin, on the well-known cryptocurrency forums. His idea resonated with a large number of people who had also experienced the same kind of seclusion and alienation on various bitcoin platforms.
All such bitcoin forums were mostly tech-focused and weren’t the best places to be for the minority groups and newcomers, who often related better to the smaller teams. These forums made it hard for people to contribute to the development of new coins. Rather, a good majority of individuals on these platforms would just sit back and speculate on the currency prices. Feathercoin was created to work as a catalyst for the cryptocurrency community activism.
One look at Feathercoin community can tell you how a dedicated and well-engaged bunch of cryptocurrency enthusiasts can develop their stable currency.
The involvement of such a group makes it very easy and more efficient to locate and address security threats and vulnerabilities. Providing this kind of protection, and constantly working towards the development of your digital currency can significantly increase its legitimacy and help you build trust among the public.
This can be very hard to accomplish if people who develop the currency function merely as passive spectators, working towards nothing but their interests.
About Coding and the Importance of Having a Long-term Vision
Coding a cryptocurrency is something that takes the least amount of time, sometimes not even a day!
Almost every cryptocurrency out there is developed based on the Litecoin’s or Bitcoin’s open source code which is freely accessible on GitHub. A working knowledge of C++ and a little bit of coding experience under your belt can allow you to customise it as per your requirements and build your own unique features in it.
It all comes down to the complexity you want in the blockchain’s parameters. While some cryptocurrencies may be a result of a simple copy-paste job on Litecoin, others may involve an entirely fresh hash algorithm.
If the latter is what you’re after, it may be more time-consuming and challenging (doable nevertheless). If all that a developer does is just pick up the code from Github, followed by alteration of some simple parameters, it’s something that any competent coder could accomplish within 30 minutes!
However, please note that just because many people have good C++ skills and can create their own cryptocurrencies doesn’t imply that you would have an endless number of currencies out there.
Quite a good number of currencies don’t last very long as they comprise of individual feature sets which, although gives them a certain degree of short-term speculative hype, their creators are often not able to sustain things over the long term, leading to their inevitable failure. The idea should be to have a long-term vision for the currency rather than making short-term speculative gains.
You cannot create and sustain a cryptocurrency over the long run unless you pay attention to not just the development aspects of it, such as constant bug fixing, but also educate users about the involved risks and work continuously towards securing their wealth. Fail to do that, and no one will stick to your currency for long. People will stop mining it, and it’d eventually die a painful death!
Gaining Miners’ Trust
Once you’ve created your coin, it would be time to build some traction for it. You’d need to advertise it every possible way, to attract the interest of potential miners.
Once people start mining your coin, it would lead to increased awareness about its existence, and then hopefully build some value for it in the eyes of users and miners. This is the point where the developers must take off their coding cap and start thinking like marketers, pondering how people put trust in and place value on things.
You’d need to engage in trust-building activities, and clearly, express your intentions and visions to the potential miners who’d have the required hardware to take your currency forward. It’s essential, to be honest in your dealings and respect the risk-reward expectations of people.
Developers often oversell their currencies, and that backfires pretty badly. There is no point including novel features just for the heck of it, only to have something to show as a differentiator. The market would waste no time in cutting your currency down to its size!
Instead, what you need is a group of committed and loyal miners who would continue processing your payments even when the going gets tough, because of nothing but their strong belief in your currency. It all boils down to constant team building initiatives and excellent communication skills.
A good number of coins fail to deliver because the makers believe that they can throw technology at any problem, and make it disappear. That’s the approach even central banks take! But the world doesn’t work that way. You should know the tasks that need to be completed, and be ready to get your hands dirty with jobs that no one else likes doing.
Signing Up Merchants
Let’s assume that you’ve done all that was asked of you – created a nice cryptocurrency, got a solid team together (which is capable of coding and nurturing it), spread the word about it and now a good number of miners are actively making it grow.
At this point, you’d need to shift your focus to market your currency so that people mining it can buy things with it. This isn’t a small task by any means! You’d be required to convince merchants that the digital bits you created hold tangible value in the real world and can indeed be traded for visible things or services, just like the trusted dollar bill.
It all goes down to strategic confidence-building measures and working out things that you believe in and stand for. Please note, at this point, people would pay more attention to your motives than your actions. Once you are confident enough about your offering, you’d need to start proactively talking about it to merchants and friends, on various social media platforms and online forums.
Please be prepared that while it might be easier to discuss your currency with people who are already in such business and are well aware of the concept, going might get pretty hard when you try convincing individuals who don’t even know about the cryptocurrencies yet.
You’d need first to get your currency accepted as a valid payment option at various online outlets, to grab these people’s attention. You shouldn’t just stop at telling them about the facts, but rather inspire them in a way that they go ahead and discover your currency’s benefits on their own.
Always remember that money is simply a tool people use to satisfy their needs and accomplish their goals. You’d need to make them believe that they can do all of that with yours.
If you look closely, you’d learn that getting merchants onboard is quite similar to how you sign up miners. You must understand and empathise with their distinct outlooks. They are both different stakeholders but should be approached based on the same rules. While miners are typically speculative, the merchants are more conservative.
When it comes to the merchants, they are merely concerned about three major objectives – making money, saving money and increasing awareness about their business. As long as you can drive traffic to these merchants and improve their sales figures (simultaneously bringing down their payment processing fees), it would be just a matter of persisting and making it easier for them to begin.
Worldwide Dominance – Should That Be Your Goal?
As per conventional wisdom and experts, global dominance should be the last thing on your mind when you grow your cryptocurrency.
Regardless of what bitcoin enthusiasts may tell, remember that no single currency has managed to dominate the world in the past 5000 years. It’s highly unlikely to happen with yours! Experts believe that it’s best to think local, letting the cryptocurrency serve the global market on its own.
And that may precisely be the way forward for the ever-evolving field of cryptocurrencies – a creation of hyper-local cryptocurrencies targeted at specific groups of people, venues, events, cities and neighbourhoods, and built specifically to meet the needs of communities consisting of like-minded people. Enabling them to trade securely, swiftly and freely, in the services and goods which hold importance in their day-to-day lives. They shouldn’t have to depend on bigger markets and central banks to tell them which currency, whether a plastic dollar or a copper coin, holds value in the real world!
They shouldn’t have to depend on bigger markets and central banks to tell them which currency, whether a plastic dollar or a copper coin, holds value in the real world!
In a global market wherein the use of cryptocurrencies is determined by the group memberships and neighbourhood boundaries, there’s no need for just one currency to be the front-runner. There will be ample room for them all!
Learning how to create your own cryptocurrency is not the most difficult task. But making it survive and gaining interest from others is the real challenge.
Let us know if you have ever created your own cryptocurrency! If yes, was it difficult?