Cost of Creating a Crypto Coin: All You Should Know

Cryptocurrency, or Crypto coin, has been the talk of the town for quite some time, and its popularity is just growing. Almost everyone you meet knows a thing or two about cryptocurrency, but only a few would have actual knowledge of what it does and how it works. Even fewer have an idea about the cost of creating a crypto coin on your own. To understand how much it costs to create a crypto coin or cryptocurrency, we first need to know the actual currency thoroughly.

Currency

Throughout our history, trade has been an area of focus for most human civilizations. If we go back – before the advent of currency, we see that the barter system was the norm back then. The barter system was a process of exchanging goods and services based on their value. With the evolution and advancement of society, barter system slowly became obsolete and trade became dependent on the currency.

The currency underwent several changes after the barter system's failure. First, it came into existence in 110 BC, and then in 250AD, the entire of Europe was introduced with gold-plated Florence. From these gold-plated Florences, we shifted towards paper currency which gained enormous popularity from 1680 until 1980. This is how modern currency came into existence.

Now the currency has taken many forms - it includes coins, paper currency, digital wallets, and credit cards. The modern currency also includes the likes of apple pay credits, amazon pay vouchers.

This method has established a (controlled)mechanism of how credit cards and currencies worked – which is overlooked by a centralized regulatory authority. However, this is not the only issue with modern currency - Hacking, DDOS attacks, identity theft, and many more vulnerabilities are present in the modern system of how currency works. This is the reason the trend is shifting towards cryptocurrency.

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What is Cryptocurrency?

Cryptocurrency is quite similar to real-world currency; however, it does not have the physical embodiment – which counts as a benefit. It is a digital or virtual currency meant to be the method of exchange, making great use of cryptography. One of its features is that it limits the number of units. As an example of the world's most successful cryptocurrency, only 21 million units of Bitcoin exist.

The benefits of owning a cryptocurrency are listed down below:

There is a limit to be maintained in terms of units.
The verification method of the transferred funds is pretty easy.
They operate independently without needing a bank or a central authority.

In addition to these benefits, you can make your own cryptocurrency by complying with certain conditions. And that is what we are going to discuss – by addressing these questions; What ground rules need to be followed? How does the process cycle work? How much does it cost to develop cryptocurrency? And why should you create a crypto coin?

Why Should you Create a Crypto Coin?

In an era where innovative solutions are being created to tackle complicated business problems by using blockchain technologies, it has become crucial for businesses looking to innovate to have their own crypto coins. Apart from opening doors to innovation, there are several reasons for investing in the setup to create your own cryptocurrency.

Cryptocurrencies are known to be the provider of financial flexibility. The involvement of any government, central bank, or financial institution is nonexistent, preventing your finances from being tracked or monitored.
Creating your own cryptocurrency gives you an edge over your competitors. In addition, it also gives you the sense of being revolutionary in front of your clients or customers – strengthening your positioning as an innovative company.
If you were to raise funds by traditional methods, it would take a lot of your time and a hefty amount of paperwork. However, fundraising with the help of your own cryptocurrency goes a long way, whether for something smaller in scale or something big like shaping your business ideas.
We all know how top-notch the safety and security of cryptocurrency it is. Creating your own cryptocurrency also helps in managing your company’s reserves. Moreover, you can benefit immensely by the autonomy and secrecy that cryptocurrency promises. If your company deals in foreign exchanges and international transactions, having your cryptocurrency can save you huge amounts that would otherwise be spent on taxes and charges on transactions.
Last but not least, the rapid growth of cryptocurrency is quite apparent. Sooner or later, cryptocurrency will be taking over the mainstream market. And lets not make the mistake of throwing it in the category of something that will take its throne in the future. In some domains and industries, it has already taken charge, where cryptocurrency is not just a demand anymore; it is a requirement.

Understanding the Difference Between Coin & Token

Let's take an example; you're buying your own vehicle and managing it, keeping up with the oil change and maintenance costs, and keeping it up to date. Or if we talk about another option, it would be that you rent a vehicle, use it and send the payment to the owner at the end of the month.

Out of the two options, you will choose what best suits your needs. It works similarly for the coins and tokens if you take this vehicle analogy a little further.

Coin

Using it's own blockchain, a coin keeps track of all the data. Similar to the analogy of owning a vehicle. This indicates that a coin is a cryptocurrency that works independently. Some examples include Bitcoin, Ethereum, and Bitcoin Cash. It doesn't require any other platform to run because coins are standalone cryptocurrencies.

Token

The analogy of renting someone else's vehicle would work perfectly for understanding token system. Here, you use someone else's coin blockchain as your base by paying rent. Creating a token doesn't require you to write the code, process validating, or create a blockchain. However, a token requires another source or platform to perform, function, or even exist. Some examples include Augur, Golem, and Omisego. These are built on top of Ethereum. However, there exist other platforms that can be used for building tokens. These include NXT's, waves and Omni, etc.

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Stages of Creating a Crypto Coin

Conceptualization

This is the initial stage of creating your own crypto coin, which includes a thorough study of the features and functions that will make your cryptocurrency or crypto coin different from others. For example, what purpose is it going to be used for? What value is it going to possess? What are the problems that your currency will tackle? All of these things will help you come up with a value proposition, that you can build upon as you go through the stages of development.

Design

The design of your blockchain is based on what your coin and the given project are aimed to achieve. Taking an example, to gain more control, a nation or a company could run a private blockchain system. This stage also deals with designing a consensus mechanism. The consensus mechanism can be of one of the two kinds:

PoW (Proof of work)
PoS (Proof of stake)

PoW (Proof of work)

Used by most of the cryptocurrencies, including Bitcoin, this Consensus mechanism is considered the most common. In this process, for the addition of blocks and validation of transactions, miners tend to go in competition with each other, and the winner gets rewarded in the form of cryptocurrency.

In this cycle, excavators will generally rival one another to add blocks and approve exchanges. The victor gets compensation in the form of cryptocurrency.

PoS (Proof of stake)

Unlike PoW, with PoS, no rivalry or competition takes place between the miners. The framework depends on validators who stake their digital currency to confirm exchanges.

Algorithm & Programming

In this step, it is crucial to pick a blockchain platform. Given its popularity, capabilities in the smart contract, and the simplification it provides in the dapp development, it is most likely that Ethereum might become your choice. You can also consider other solutions such as Binance, Solana, Hyperledger, and smart chain.

QA Testing

It is crucial to check for faults and vulnerabilities in the coding of your blockchain. This step helps a million when it comes to safety – by making the weaknesses known, you can then work on eliminating them – improving the quality of your blockchain. Having strict QA practices also helps you gain investors' trust.

Deployment & Soft Launch

This stage deals with the deployment of smart contracts and launching among well-known chains (such as Binance, Ethereum, and more) with support from the developers. However, it isn't necessary that only a developer launches it; you can also do it on your own as you like.

ICO

ICO stands for Initial Coin Offering – its done when a company or an organization decide to raise funds to develop new coins or applications - or wants to provide any new digital service in the market. The launch of ICO can help plenty in raising the funds needed for coin development.

Marketing

How do you market your coin? Well, taking the help of social platforms like Twitter, Facebook, Instagram and Youtube can give you plenty of boosts when it comes to raising awareness regarding your newly launched crypto coin.

Apart from that, many coin platforms can also be utilized, like CoinSnipper and Coinhunt. Not to mention, running advertisements is also quite helpful. But, in the end, whatever platforms you decide to utilize, make sure you are reaching the right audience with the right message.

Maintenance

Maintenance of a crypto coin takes some effort on organization’s part. Take an example of the crypto airdrop, a strategy to market the crypto coin. Startups utilize this strategy a lot. However, to get the most benefit out of it one has to monitor it closely – keeping an eye on the outcome.

Another factor that needs to be watched carefully is the staking issues that occur when the market is down. In short, companies need to be aware and vigilant, when it comes to maintaining crypto coins effectively.

Forking vs. Creating a Coin From Scratch

Fork

Fork alludes to the production of new cryptocurrency in view of old cryptocurrency while introducing a couple of changes. Since digital currencies are generally open source, the code can be uninhibitedly altered, replicated, and reused. By rolling out specific improvements, small groups believe that they can give a new shape to the cryptocurrency.

Assuming the larger part dissents, they can get fundamentally separate. This way, they take an existing cryptocurrency, alter the code, and veer off their adaptation. A different blockchain is made at the point when this occurs. Until the second it separates, it has a common history with the first chain. But once separated, there are two blockchains and two cryptocurrencies. In light of their common history, proprietors of the first cryptographic money will likewise possess the same sum as the new digital currency.

Starting there, the worth of the upgraded one is determined. This whole parting process is known as the fork. The renowned fork you may know about is the one that occurred between Bitcoin and BitcoinCash. BitcoinCash split off the Bitcoin blockchain and now these are two separate digital forms of money with two separate blockchains.

Creating a Coin from Scratch

When it comes to creating a crypto coin from scratch, there are several things that need to be taken care of. You have to characterize your targets, plan an agreement instrument in the form of a consensus mechanism, pick a blockchain stage, make the hubs, produce the inside design, produce a wallet address, and coordinate the APIs; then there comes authorization of the digital currency you have created. Then last, but not the least, you have to focus on developing your cryptocurrency to a stage where it grows, and produces results.

Creating a Coin from Scratch

Cost of Forking an Established Coin

To get into the depth of forking an established coin, it is worth getting familiar with the types of forking. Cryptocurrencies can be forked using one of two methods - Hardfork & Softfork.

Hardfork

Hardfork works as a radical change that tends to converse with or alter the network protocols, such as validating or authorizing the blocks and transactions that were previously invalid. In a hard fork, it is also necessary for the users and nodes to improve or shift to an upgraded, newer version of the software that provides protocols.

Softfork

Softfork has similar functionalities as Hardfork, but offers a better value. Even if the nodes tend not to shift to the upgraded versions, they can still be validated. To put some clarity on the matter, Softfork is considered to be more secure and safer than Hardfork.

Coming on the cost of forking - as of today, it is $0.01688

Cost of Creating a Coin From Scratch

Today, it has become crucial for many businesses to create cryptocurrency or crypto coins of their own. Producing results 24/7, crypto has proven to be one of the most beneficial investments for big corporations. In addition, it's not that costly to create a crypto coin. You can create it without having to spend your entire savings on it. The cost of creating your own coin can range from 10k USD up to 30k USD.