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Anyone can make a crypto coin. Much of the beauty of the blockchain lies in its decentralized, peer-to-peer nature, making it completely democratic and accessible by anyone with an internet connection. You can either make your own crypto coin, or if you don’t have the programming knowledge, someone else can make it for you. But before getting started, it is important to understand the technical requirements involved, have a clear mission and goals, and grasp the strategic choices that can make or break a project.
In this article, we break down the steps involved in making a crypto coin, such as creating your own blockchain, the costs involved, and legal requirements.
How to make a crypto coin
There are several ways to make a crypto coin. The first is to create a new blockchain. This is the most complex method where everything must be built from scratch, including writing your own code to create a new blockchain, then its native coin. This option gives creators the most freedom, which is especially important if they have a truly innovative idea that cannot be supported by any other blockchain. But it also requires a deep understanding of blockchain infrastructure, extensive experience in coding, and a rather significant initial investment.
The second way to make a crypto coin is to modify the code of an existing blockchain (also known as forking). Most blockchain codes are open source, such as Bitcoin or Litecoin, meaning anyone can view and download them. This option still allows crypto coin entrepreneurs to create a native coin, but it means they can skip the trouble and time involved in creating their own blockchain. This option still requires technical knowledge and skills as there is plenty of coding involved, and can be costly, but it is a faster way to make a crypto coin.
The third way to make a crypto coin is by creating a coin or token on an existing blockchain. This option requires a moderate level of knowledge, but basic computer skills, budding crypto coin creators can use platforms designed to make the coin for you, such as the Ethereum platform and Binance Smart Chain. This is the cheapest and fastest way to make a crypto coin, however it does limit the creator’s freedom in terms of design and functionality, as they are dependent on the parent blockchain’s performance and fees. This third option is often used to create utility tokens, but not coins that require a unique infrastructure.
The fourth and final option is simply to hire a developer to do the legwork for you. This is likely the most expensive way to make a crypto coin, as creators will be paying for the developer’s time and skills. These companies are generally known as blockchain-as-a-service (BaaS) companies, and while some are able to develop customized blockchains, others use their own existing blockchain infrastructure.
The costs involved in making a crypto coin
Making your own crypto coin will incur several costs, which will depend on the level of customization and technical complexity involved in your project. Unless you have prior knowledge and experience in programming to make a crypto coin yourself, it might be necessary to hire a BaaS to help you. This means costs can rise quickly, again, depending on the scope of your project. There are also infrastructure costs to bear in mind, such as fees for using servers, storage and network systems to support your blockchain’s operations.
In order to launch a legitimate project, it will also be necessary to audit your coin or token, an essential step to pinpoint vulnerabilities and increase security, and also an extra expense. Then, once your coin or token has been launched, you’ll need to promote it. Marketing and promotion expenses can also be costly, but this is an essential step in creating a brand around your coin, attracting investors and building a community.
Are there legal requirements involved in making a crypto coin?
Making a crypto coin or token is legal in most countries, but some jurisdictions have banned (or partially banned) cryptocurrency. Once you’ve determined that it is legal to make a crypto coin in your country or region, you then need to determine how your coin or token will be classified, for instance, as a commodity, security, or another financial instrument. Depending on its classification, you may be required to adhere to certain standards and regulations set by authorities such as the Securities and Exchange Commission (SEC) in the U.S., and could require official licensing.
Crypto coin developers and entrepreneurs must also comply with tax laws, including the correct reporting of gains and losses. Legal requirements also involve implementing Anti-Money Laundering (AML) and Know Your Customer (KYC) measures to monitor and verify users and their funds. Companies such as Chainalysis and Sum & Substance can help with these measures. The legal requirements of making a crypto coin or token and the legal status of said coin will vary from country to country, so it is crucial to conduct in-depth research on the specific local regulations before launching your project to the public.
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