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How to create your own cryptocurrency?

11 December 2017 21:00, UTC
The growing popularity of cryptocurrencies and the huge dynamics of their price attract more and more attention. Some people make money on the difference in cryptocurrency exchange rates while others invest in ICO projects, however there even those who even think about creating their own cryptocoins. Bitnewstoday.com figures out whether it is possible to create your own cryptocurrency and how difficult it is.

First of all it should be pointed out that it is important to understand why cryptocurrency is created. There is no need to create a cryptocurrency with no additional value. "The cryptocurrencies and tokens that have good reasons for their existence, such as Ethereum, which helps to build smart contracts, are in demand," says co-founder and managing partner platform for the development of cryptotrading Simdaq Evgeny Dubovoy.

At the first stage of creating a cryptocurrency, it is necessary to determine the platform and algorithm. Let's take a look at what platforms have been chosen by the existing cryptocurrencies.

According to cryptocompare.com, 34% of the cryptocurrency projects were hybrid PoW/PoS, 27% - PoW, 12% - PoS, and 1% DPoS.

The following cryptocurrencies can be categorized as hybrid PoW/PoSg: DASH (Market Cap - $5,6 billion), BitConnect Coin ($1,2 billion), etc.

While PoW is a system was used to create such cryptocurrencies as Ethereum, Bitcoin Cash, Bitcoin Gold, Litecoin, Monero, Ethereum Classic and others.

The largest cryptocurrencies in terms of capitalization created with PoS are the following: Cardano (Market cap - $2,6 billion), QTUM ($900 million), OmiseGo ($845 million).

Pic. 1 Cryptocurrencies by proof type
Source: Calculation of Bitnewstoday.com according to Cryptocompare.com

As for the cryptocurrencies algorithm, 25.9% are operated on the Scrypt algorithm. The list includes Litecoin (Market cap - $5,6 billion), BitConnect Coin ($1,2 billion) and others.

12.6% of the cryptocurrencies have chosen the X11 algorithm. It was offered by DASH creator Evan Duffield. 8.6% of projects operate with SHA256, including Bitcoin Cash (MArket cap - $24,7 billion).

Pic. 2 Cryptocurrency algorithms
Source: Calculations of Bitnewstoday.com according to Cryptocompare.com

It should be noted that a cryptocurrency, which was copied from another coin, won't be popular, so the developer will need to improve the code.

Experts point out that cryptocurrency in theory can be created by a single person, but it must be a genius. Therefore, it is necessary to build a team of professionals to implement such an ambitious project as the creation of a cryptocurrency. It requires not only good technical skills, but also excellent knowledge in the field of strategic management and marketing.

When a cryptocurrency enters exchange, first of all it is important to implement the so-called market-making process - the process of creating the right mood for traders and to make sure that there will be supply and demand, experts advise.