How to Create a Cryptocurrency: Everything You Need to Know

7 min readApr 23, 2019

This article will guide you along the main technical and business aspects of cryptocurrency creation.

What is a Cryptocurrency?

Cryptocurrency is a decentralized digital currency that uses encryption techniques to regulate the generation of currency units and to verify the transfer of funds. Anonymity, decentralization, and security are among its main features.

Today, more than 1,600 types of cryptocurrencies, including the most popular ones like Bitcoin, Ripple, and Ethereum, are available.

How Does a Cryptocurrency Work?

Cryptocurrency is an integral part of the blockchain. Cryptocurrency is issued every time a new block is created and is used as a reward and incentive for blockchain participants taking part in the consensus mechanism and closing blocks.

Cryptoholders can transfer cryptocurrency assets between wallets and blockchain addresses, exchange it for fiat money, or participate in cryptocurrency trading.

Difference Between Coins and Tokens

Cryptocurrencies can be divided into two large subcategories — coins and tokens. A coin operates on its own blockchain where all transactions occur. Examples include Bitcoin, Ethereum, Neo, and Emercoin.

A token works on top of an existing blockchain infrastructure, like NEO or Ethereum, which is used to verify transactions and make them secure. Tokens are often used like smart contracts, representing everything from physical objects to digital services.

Advantages and Disadvantages of Cryptocurrencies

These benefits and drawbacks should be taken into close considerations. You need to decide what the purpose of cryptocurrency creation is for your company.

Creating a Cryptocurrency: Technical Matters

In the table below, you will see the pros and cons of building coins or tokens:

Key Business Processes to Make a Cryptocurrency

Define your idea
Choose the right development team
Create rules for smart contracts
Hire an external audit company
Dedicate time to crafting a white paper
ICO promotion
Create a strong community and support it

How to Make Your Own Cryptocurrency: Example

Down below we have the structure of any basic cryptocurrency or token.

Create an Ethereum Token

Here, you will need to use the ETH wallet app. When you open the wallet app, at the top right corner, you will see a button as depicted below, “Deploy New Contract”, click it.

Once you click, a Solidity Contract Source Code field will pop up. Enter this code in the field that pops up.

contract MyToken {
    /* This creates an array with all balances */
    mapping (address => uint256) public balanceOf;
}

The phrase “mapping” stands for an associative array, which associates balances with addresses. All addresses are in hexadecimal format. “Public”, which is bolded, means that anyone will be able to see balance. After you add a line of code to the Solidity field, your screen should look like this.

However, this doesn’t mean that your cryptocurrency has actually been created. What you need to do now is add another line of code under line 4 in the Solidity code box as follows:

function MyToken() {
    balanceOf[msg.sender] = 21000000;
}

Your initial token supply will be 21 million. However, you can easily set this amount to anything you like. Let’s take a glance at the right side of the application. Click “Select Contract to Deploy” and a drop-down window will open. Click “MyToken.”

How to Move Your Cryptocurrency

After following the aforementioned steps, you will have a smart contract that is linked to a token. However, you can’t move them yet. Let’s fix that by adding the following code below the last bracket in the Solidity field.

/* Send coins */
function transfer(address _to, uint256 _value) {
    /* Add and subtract new balances */
    balanceOf[msg.sender] -= _value;
    balanceOf[_to] += _value;
}

What we have here is relatively self-explanatory. We can send tokens and values will be subtracted or added where necessary. However, how do we handle people that want to send more than they possess? In order to stop a contract from executing itself under such conditions, we add another line of code to the Solidity box.

function transfer(address _to, uint256 _value) {
    /* Check if sender has balance and for overflows */
    require(balanceOf[msg.sender] >= _value && balanceOf[_to] + _value >= balanceOf[_to]);    /* Add and subtract new balances */
    balanceOf[msg.sender] -= _value;
    balanceOf[_to] += _value;
}

We must now add some basic information into the Solidity field pertaining to our contract. Proceed like so:

/* Initializes contract with initial supply tokens to the creator of the contract */
function MyToken(uint256 initialSupply, string tokenName, string tokenSymbol, uint8 decimalUnits) {
    balanceOf[msg.sender] = initialSupply;              // Give the creator all initial tokens
    name = tokenName;                                   // Set the name for display purposes
    symbol = tokenSymbol;                               // Set the symbol for display purposes
    decimals = decimalUnits;                            // Amount of decimals for display purposes
}

Creating Events and Deploying Your Cryptocurrency

After we have gone through all of the steps mentioned above, we now need to create something known as “Events.” These are essentially empty functions that allow Ethereum wallets to monitor the activities of a contract. Remember that every event must start with a capital letter. In order to declare an event, the following code must be added:

event Transfer(address indexed from, address indexed to, uint256 value);

As well, within the “Transfer” function, add this:

/* Notify anyone listening that this transfer took place */
    Transfer(msg.sender, _to, _value);

After you do this, your token is essentially good to go, all you have to do is deploy it.

Navigate over to the “contracts tab” and hit “deploy new contract.” Following this, copy and paste the token source. If there is an issue, Solidity will notify you. On the right side of the application you will see a few parameters such as _supply, _name, _symbol, _decimals, you can tweak and alter all of these to your liking.

After tweaking all of this, you can then set a fee for your token. You’re good to go and you can deploy your cryptocurrency. Check out the image to the right for more information. The password field will prompt you to enter the password that you set when you downloaded the wallet app.

Best Cryptocurrencies on the Market

According to Coinmarketcap, there are 2,110 cryptocurrencies on the market and the number is still growing. While it is impossible to name the single best cryptocurrency on the market, on the image we have listed the most popular ones.

Costs to Create a Cryptocurrency

Usually, the cost of cryptocurrency development includes the following expenses, but may vary greatly:

Is it Worth it to Create Your Own Cryptocurrency?

Technical issues are the hardest part of creating your own cryptocurrency. You can easily find tutorials on how to create your own cryptocurrency in 15 minutes or how to make a cryptocurrency without coding, but in reality, creating cryptocurrency is not easy. You need to have extensive experience in blockchain programming to accomplish the goal. Only qualified specialists have the knowledge and experience to walk you through this challenging task.

This is a brief summary of an article published on MLSDev blog. If you would like to know more details about cryptocurrency creation — read the full article.