Have you ever thought of printing your own dollars, or any other currency? Well, this may sound a bit absurd to people who know nothing about cryptocurrencies. But, when you’ve already arrived on this page, it means that you already have the basic understanding of digital or virtual coins.
Unlike fiat currencies, creating a new virtual currency is not any rocket science today. Anyone with basic coding skills can launch their own digital currency via Initial Coin Offering (ICO). So, before rushing in to introduce your own crypto token, it is essential to know the basics and mandatory steps that need to be followed.
What is an ICO?
The term ‘Cryptocurrency’ has grabbed a lot of attention in the recent few years. Almost everyone is looking up to the crypto market, wanting to invest in one or the other cryptocurrencies and take home unparalleled returns in minimum time. However, if you ask, from where and how do cryptocurrencies come into existence? The answer is, ICO!
Initial Coin Offering is a form of fundraising raising tool used by entrepreneurs to raise funds for a new and innovative blockchain-powered project or solution. Once enough capital is raised, these become eligible to launch their cryptocurrencies in the market. Typically, an ICO involves selling of a new cryptocurrency to raise funds for a particular project initiated by a company or a group of people.
Steps to Launch a Cryptocurrency
1) Decide whether you want to build your own blockchain from scratch or fork an existing one: If you want to fork an existing codebase, then you need to write a smart contract. Coding the cryptocurrency would be easy as the open source code of Bitcoin or Litecoin is already available on GitHub.
2) Devise an unique feature that your cryptocurrency will offer: There are numerous cryptocurrencies floating in the crypto market. If you are planning to introduce another one, then it should have some unique selling proposition to stand out in the crowd. You need to understand your target consumers and define the benefits of your currency accordingly.
3) Spread the word by educating people: People are simply not going to accept your cryptocurrency instantly as you launch it. It is essentially important to explore the pain points of the target community, find relevant use-cases and illustrate how your new currency is going to address their concerns. Educate people about the available cryptocurrencies and their associated risks, and explain them what’s there to offer in your bucket.
4) Develop a Prototype before launching the currency- People believe what they see. Therefore, instead of hitting your head and explaining your concept to people, you may develop a prototype and demonstrate its unique features. In building a prototype, you will also come across the loopholes that could possibly hinder the success of your cryptocurrency. Think from a hacker’s point of view, and eliminate the possible vulnerabilities that could show up.
5) Get miners onboard- Once the development is over, you will need enough cryptocurrency miners. You must start making people aware about your cryptocurrency so that they start mining it. Once miners gain interest in your coins, he value of your currency will automatically improve. You need to build trust with miners and communicate your vision with them.
6) Search for investors- Finding investors should be done at the end when you have gained enough trust on the uniqueness of your currency.