If you aren’t an expert coder but have been a keen armchair observer of Bitcoin, Dogecoin, and every other increasingly niche cryptocurrency, you might be wondering if it’s feasible to create your own.
Well the answer is Definitely “YES”.
First, it’s important to understand the difference between coins and tokens. Both are cryptocurrencies, but while a coin—Bitcoin, Lite-coin, Dogecoin—operates on its own block-chain, a token lives on top of an existing block-chain infrastructure like Ethereum. A block-chain is, at its simplest, a record of transactions made on and secured by a network. So, while coins have their own independent transaction ledgers, tokens rely on the underlying network’s technology to verify and secure transactions and ownership. In general, coins are used to transfer wealth, while tokens can represent a “contract” for almost anything, from physical objects to event tickets to loyalty points.
Tokens are often released through a crowd-sale known as an initial coin offering (ICO) in exchange for existing coins, which in turn fund projects like gaming platforms or digital wallets. You can still get publicly available tokens after an ICO has ended—similar to buying coins—using the underlying currency to make the purchase.
Anyone can create a token and run a crowd-sale, but ICOs have become increasingly murky as creators take investors’ money and run. The Securities and Exchange Commission is cracking down on ICOs and moving to treat tokens as securities that, like stocks, must be regulated. The SEC cautions investors to do their research before buying tokens launched in an ICO.
The very idea behind cryptocurrency is that the underlying code is accessible to everyone—but that doesn’t mean it’s easy to understand. Here are the paths to creating your very own coins and tokens.
Build Your Own Block-chain—or Fork an Existing One
Both of these methods require quite a bit of technical knowledge—or the help of a perceptive developer. Because coins are on their own block-chains, you will have to either build a block-chain or take an existing one and modify it for your new coin. The former takes serious coding skills and even though tutorials exist to walk you through the process, they assume a certain knowledge level, and you don’t finish with a fully functioning coin.
Alternatively, you can fork an existing block-chain by taking the open-source code found on GitHub—Lite-coin, for example—making a few changes, and launching a new block-chain with a new name (like Garlicoin). Again, this requires you to understand the code so you know what to modify and why.
Platform
This option is the most feasible for the average person—a creation service will do the technical work and deliver your finished coin or token back to you. For example, CryptoLife will actually build a custom coin, and all you have to do is enter the parameters, from the logo to the number of coins awarded for signing a block. (That is, when they’re open for business—as of press time, orders are currently closed.) They even have pre-built templates that only require you to provide a name and a symbol. The base price for this service is 0.25 BTC ($2002.00 as of this writing), and you’ll receive your coin’s source code in a few days. WalletBuilders has a similar service starting at 0.01 BTC as well as a free test version.
You can also create a token—what is essentially a smart contract—with or without a public ICO. Because tokens can represent any asset, from a concert ticket or voting right to funding via a crowdsale or a physical currency, you can even create a token with no real value or serious purpose other than to exchange among friends. This is faster, simpler, and cheaper than creating a coin because it doesn’t require the time and effort to build and maintain a new or forked block-chain and instead relies on the technology already in use for Bitcoin or Ethereum.
A common product is an ERC-20 token, the standard for those built on the Ethereum block-chain. The code for these token contracts and crowdsales is also available for the very ambitious, but there are user-friendly platforms that will walk you through the process.
With CoinLaunch’s CoinCreator, for example, you’ll need to add the METAMASK extension—which connects you to the Ethereum network—to your browser and then follow their walk-through video to build your token and launch your ICO. The platform offers the option to create bonuses and vesting schedules for investors or even launch a token contract without a crowdsale. The token contract process is free, but CoinLaunch takes a commission from each ICO (4-10% depending on much money is raised).
If you’re crypto-curious, there’s no penalty to experimenting with token contracts. Start with an ERC-20 token—using CoinLaunch, for example—that you can distribute to your friends and then cash in to whoever buys drinks at the bar. There’s no monetary value or commitment attached, but this will help you understand the technical aspect as well as how tokens work. An ICO probably won’t be appropriate for the casual observer because of increasing regulation and penalties for misrepresentation.
And if you don’t have coding experience, you’ll probably want the help of one or more developers.
