Cryptocurrency Business Guide – Do you know how to start a cryptocurrency business? The cryptocurrency market has gone from a lot of hype around a pipe dream to a booming success story in just a few years.
Where once there was just Bitcoin, there are now thousands of crypto assets. And the industry shows no sign of slowing down anytime soon. As of early April 2022, there are more than 18,000 cryptocurrencies, with new ones added every day. And some cryptocurrencies have market capitalizations above $1 billion.
Cryptocurrency Market cap
The excitement surrounding cryptocurrencies has led to many businesses wanting to get in on the action and create their own cryptocurrency. How to start a cryptocurrency business and is it possible?
Bit of planning: Cryptocurrency Business Guide
If you’re looking to get off the sidelines, how does cryptocurrency work, and join the cryptocurrency action. There are some things to keep in mind to help ensure your crypto attracts interest. Here’s a look at what you need to know.
Difference Between Coins and Tokens
Before we get into how to create a cryptocurrency, best way to invest in cryptocurrency, it’s important to clear the air on something. Which is that not all cryptocurrencies work the same way. There are two categories of cryptocurrencies: coins and tokens. When it comes to creating a cryptocurrency, you’ll hear a lot about coins and tokens, and it’s crucial to know the difference between the two.
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For Starters: Cryptocurrency Business Guide
For starters, a coin runs on its own blockchain. Bitcoin, Litecoin, best crypto for beginners, and Binance Coin are examples of coins, and each operates on a different blockchain platform. So, if it’s a coin you have your heart set on creating, then you’ll have to build your own blockchain.
However, tokens are built on top, how to invest in cryptocurrency for beginners, of existing blockchain infrastructure. Which is used to verify the security of transactions. Companies often release tokens as part of an ICO, or initial coin offering, as a way to raise capital in the crypto realm.
Coins, which have broad usage, are digital replacements for traditional money. But tokens, specifically utility tokens, are limited to a particular project or organization and represent access to specific products, services, or discounts. Think of tokens as loyalty points to your favorite clothing store and coins as traditional money.
Sure, you can use both to make a purchase, but with the loyalty points, you can only use them at that particular store. While with the actual money, you can shop anywhere. Another difference to keep in mind is that coins can buy tokens, but tokens can’t buy coins.
What to Consider When Creating Your Cryptocurrency
Creating a cryptocurrency – especially a successful one – takes a lot of work. We can’t downplay the investment of time and money that goes into creating valuable crypto assets.
Start a Cryptocurrency
Of course, anyone can start a cryptocurrency, which is why there are so many popping up on a regular basis. But just because anyone can create a cryptocurrency doesn’t mean it’s right for everyone. The truth is that creating a cryptocurrency is the easy part of the process; the real challenge comes with maintaining and growing your asset over time to give it value.
Cryptocurrency: Cryptocurrency Business Guide
Creating and launching a cryptocurrency doesn’t automatically give it value. In fact, there are many cryptocurrencies that are now worthless. So before you go all-in on creating a cryptocurrency, define the features of your token or coin, what makes it different, and what you want to achieve.
Creating a token Cryptocurrency Business Guide
On top of that, if you’re thinking of creating a token to generate capital through an ICO (initial coin offering), you’ll need to be diligent to make sure you don’t land in hot water with the U.S. Securities and Exchange Commission (SEC).
Registered with the SEC
Though ICOs are largely unregulated in the U.S., some are considered securities, which means they need to be registered with the SEC or fall under a registration exemption. The SEC has also been cracking down on fraudulent ICOs, so hiring a securities lawyer is a good idea to help ensure you don’t accidentally violate any federal laws.
Options for Starting a Cryptocurrency
Once you’ve decided that you want to start a cryptocurrency, there are four main ways to create a digital asset. Which one you select comes down to whether you want to start a coin or a token.
Build a New Blockchain Cryptocurrency Business Guide
We might as well deal with the most challenging option first: building a new blockchain. Writing your own code to create a new blockchain for your cryptocurrency is one possible option. It’s possible, but it’s far from easy.
Technical Skills: Cryptocurrency Business Guide
One benefit of creating a new blockchain is that it affords you the most freedom for designing your coin. But taking this route requires some serious advanced technical skills and a thorough understanding of how blockchain technology works.
New blockchain: Cryptocurrency Business Guide
There are online courses that can help to create a new blockchain, but even those require more than just basic technical know-how. If you can’t explain to someone how blockchain technology works, this isn’t the option for you.
Forking an Existing Blockchain
If you’re interested in creating a native cryptocurrency but don’t want to go through the hassle of starting a blockchain from scratch, forking an existing blockchain is an option that’s faster and less complicated.
This process involves using the source code of an existing blockchain to create a new blockchain for your cryptocurrency. For example, to fork an existing blockchain, you would take an open-source code, which can be found on GitHub, alter it, and then launch a new coin.
Forking an established blockchain
Blockchain forks have helped create many well-known cryptocurrencies, such as Litecoin and Bitcoin Cash. While forking an established blockchain isn’t as complicated as creating one from scratch, it still requires in-depth knowledge of modifying existing code.
Use an Established Blockchain
If the fork process still sounds like too much for you to take on, an easier option is to create your cryptocurrency on an existing blockchain platform, like Ethereum. Using an existing blockchain platform to start a cryptocurrency means your asset will be classified as a token.
limitations than a coin
While creating a token has more limitations than a coin, it is the simplest and most affordable way to start a cryptocurrency on your own. Plus, being associated with an established and reputable blockchain platform can benefit your token’s value and validity.
If creating a coin or token is beyond your technical skills, or you just don’t have the time to dedicate to it, a final option is to hire a blockchain-as-a-service (BaaS) company. BaaS companies, such as IBM Blockchain Platform, Amazon Managed Blockchain, Kaleido, and ChainZilla, will build and maintain blockchain networks and cryptocurrencies.
Using a BaaS company allows for lots of customization with your cryptocurrency, with some offering to develop a blockchain from scratch and others using their blockchain platform. Think of BaaS companies as the blockchain equivalent of web hosting providers.
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