What does cryptocurrency mean exactly? Cryptocurrency is a digital currency that relies on encryption to generate new units and confirm transactions. It has all the functions of currency. The difference is that it runs outside of a single centralized platform, like a bank.
Cryptocurrencies have coins instead of paper money. Coins are often confused with tokens. Basically, there are several critical differences between coins and tokens.
Understanding of coin, token and blockchain
Coins need their own blockchain, and tokens can run on existing blockchains. Also, tokens are limited to specific items, while coins can be used anywhere. And last, coins can buy tokens, but tokens cannot purchase coins.
Most importantly, if you want to create a cryptocurrency, you need to build a blockchain.
Blockchain is a record of transactions that are carried out on the network and protected by the network. Therefore, although tokens have their own independent transaction ledger, tokens rely on the technology of the underlying network to verify and protect transactions and ownership. With coins, you are able to transfer wealth. Simultaneously, tokens represent a “contract” for almost anything, starting from physical objects finishing to event tickets.
Tokens are usually issued through crowdfunding called initial coin offering (ICO) in exchange for existing tokens to fund projects such as gaming platforms or digital wallets. After the ICO is over, you can still get publicly available tokens to make purchases using the base currency.
How can you create your own token?
Anyone can create tokens and conduct crowdfunding, but if the creator takes the investor’s money and runs it, the ICO may become blurred. This is why investors highly more trust ICOs with regulations.
CoinMarketCap lists over 5,200 tokens and coins available on public exchanges. However, not all tokens have made it to the exchange-Etherscan. This exchange-Etherscan provides Ethereum analysis, has more than 403,000 contracts in its files. In April 2018, this total was only 71,000.
The idea behind cryptocurrency is that everyone can access the underlying code. However, it doesn’t mean it is easy to understand.
Tips for launching your very first coin if you are not familiar with coding and programming
For ordinary people who don’t know the basics of coding, a creation service that completes technical work and returns the completed coins or tokens to you is a great option. For example, you can check out WalletBuilders that provides a free coin launch tool for those who just want to experiment with this process. It also provides a paid package for creating available coins.
Rally is an invitation-only coin creation platform, which is built on the Ethereum blockchain.
You do not need a public ICO for creating tokens. Why? Because a token demonstrates any asset. Basically, you can even launch a token that has no actual value or purpose. You can just use it for fun and exchange it with friends.
This method relies on technologies already used in Bitcoin or Ethereum. However, it is the more straightforward, faster and cheaper process of creating coins, not requiring much effort and time.
A common product is an ERC-20 token, which is a standard built on the Ethereum blockchain. These token contracts and crowdfunding codes are also available for ambitious people. Besides, there are user-friendly tutorials and YouTube videos and some platforms that can guide you through the process of creating tokens in just a few clicks.
Bottom line
If you are interested in crypto, there is no penalty for trying token contracts. You can even create ERC-20 tokens that you will distribute to your friends. Later, you can cash them out to anyone who buys drinks at the bar.
There is no added monetary value or promise, but this will help you understand the technical aspects and how the token works. Due to the regulation of the US Securities and Exchange Commission and severe penalties for false statements, ICOs may not be suitable for casual observers.
The Crypto industry highly fluctuates. Even you launch a very well-organized token/coin, you might not manage to get considerable income. However, considering these basic steps we discussed will take you on the right path.
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