It really seems like everyone wants to get into Cryptocurrency craze and developing your own coin or token is becoming an increasingly popular way to jump in on the wagon. It got me thinking,
How hard is it to create a Crypto?
There is a lot to think about, especially since a recent report found that nearly half of 2017’s Initial Coin Offerings (ICO) have failed.
Andy Bromberg, CEO of
“Watching ICOs is a deeply technical process but at a high level, the process looks a lot like starting a startup”in a CNBC interview
The first step is defining your coin which is more than just a name. It could be a replacement for cash or assigned a specific utility for example “The CryptX Token” or asset . The utility token can be services that can be purchased or exchanged.
Lets understand this with a hypothetical example.
I want to launch my own cryptocurrency and I name my hypothetical coin as “SIGMA”. As for our coin ’s purpose, we are not planning to make a money replacement. We had to decide a very specific function for the coin to ensure it achieves a specific objective and also being marketable to the cryptocurrency community. So it’s best to treat this point as purely knowledge-based. E
Lets start Building.
- It all starts with a source code. Think of it as a blueprint to a house.
- Now we have to decide the blockchain which we are going to use to support our coin and in this case we’ll use Ethereum Blockchain for a while and look forward to ANVIL Blockchain when it launches.
- After deciding the blockchain, you can edit the coin’s name and the rate of the supply. Creating a coin isn’t something you can do from a coffee shop.
- There are a lot of steps in between including getting some investors on board.
Kevin O’Leary, Chairman of O’Shares ETFs stated in an interview:
“I tell everybody that approaches me with the utility tokens, What do I own? What actually am I taking real money and giving it to you for? I’ll say this about the concept based on Knowledge-based token, If you could sell this, you could sell some real product too.”
Many coins use whitepaper and they can be dozens of pages long. Some are full of graphics while others are packed with mathematical equations which shows how a token will exist on the blockchain.
It’s time to make sure what I’m planning is legal and that means consulting an attorny with cryptocurrency experience.
Jeff Bandman, Founder of Bandman Advisors states:
“The Investment market and the issuing market needs to be on notice now, the regulators are paying attention.”
Answering these complex legal questions of the long-term viability of this “SIGMA” coin was challenging but important especially if was supposed to have a shot at getting a theoretical greenlight from the SEC or any other Exchange commission.
After my coin goes through all these phases, it should be ready before its debut. You get everthing signed and wired and raised the money, and there you go, you get your own cryptocurrency and then you are off to the races in the real market.
Let your brain horses run the races, you never know you might create something legendary out of it.