Cryptocurrencies have gained huge traction as a result of the ongoing coronavirus pandemic. The technologies such as blockchain-based services and app development, crypto-trading platforms have altered the way businesses operated till now.
As the cryptocurrency market takes an upward trajectory many who want to venture into this arena will not find a right time. Presently estimated at USD 1.03 billion, the market for cryptocurrencies is poised to swell to 1.40 billion by 2024. This is basically due to the rise of emerging markets in an increased manner. Countries such as India and China are taking baby steps towards the concept, while developed countries such as the US and Germany have already taken to it like a duck to water.
Unleashing your own cryptocurrency can be accomplished in two ways: Beginning to develop a new currency from ground up, or forking a blockchain and creating a fresh currency from an old one. Let us look into some choices.
Starting From Scratch
Making something from scratch can be extremely bad and the same holds true for cryptocurrency as well. It requires a lot of strategizing, work, and finance to carve out a new legal tender. It is likely to take a big toll on you. In fact, the majority of them fail due to lack of before and after launch public engagement. Let us see how you can achieve from ground up:
Get a good grip on market and competition
An effective idea takes a lot of time. To develop such an idea, people should be aware of the market, existing products, and should have clarity over imminent need. An in depth knowledge about competitors is also very essential.
Legalities
Several countries have embraced cryptocurrencies, but there are others who have not shown enough enthusiasm. In the absence of a good legal framework to control cyber money trade, countries have been reluctant towards it, as they fear misuse. For this reason alone legal research for the target country becomes essential.
White Paper is of paramount significance
A white paper is a vital document that makes everything crystal clear. From the creation of the currency to market assessment, legal options, etc., a white paper bares everything. It is in the best interest of everyone to come out with one soon after the creation of the currency as not only investors go through them even people belonging to the cyber community, like programmers, can refer this and identify potential errors.
Public involvement cannot be ignored
Innovative PR is critical, not just to draw the attention of investors but also to involve customers. Putting money in an organized, informative official website helps a lot.
Foolproof Distribution Plan
An Initial Coin Offering (ICO) needs a flawless, efficient distribution strategy. Pre-sale, general sale, private sale are few of the distribution plans employed on a large basis. The makers need to take a call on the planning aspect in line with their strategy.
Forking An Existing Currency
Forking the active currency is like taking away cryptocurrency from the protocol it is based on, resulting in the birth of a new currency having a fresh protocol. Forking is not easy and can be an excruciating process, but several developers have reportedly used this technique. Bitcoin Cash and Ethereum Classic are few of the shining examples.
Soft Forks
Soft forks are something that gel very well with older variants of the currency also, and computers or nodes which hardly get updated perceive them as valid.
Hard Forks
If a protocol update separates a currency from its previous protocol, a hard fork is accomplished. It triggers an entire new currency having its own protocol.
Reaching Consensus
Hard fork protocol updates require the general agreement of the majority of the community. A good number of members will have to download the update; there are several ways of reaching the consensus, for instance, Proof-of-Work, or Proof-of-Stake.
Hard Forks can be a bit harsh
Post hard forks, one currency used to dominate the other, like that of Ethereum and Ethereum Classic. Further, differences might crop up in the community which can become a bit toxic.
Not being regulated can be a blessing, at times
Whales happen to be traders having a filthy amount of the currency to influence market prices. If Whales come to know about a fork in advance, they will purchase more currency, as there’s a 1:1 distribution ratio after the fork. For obvious reasons, this can be termed insider trading, but due to cryptocurrencies not regulated thus far, this will be permitted.
Concluding thoughts
Despite being a baby in diapers there is immense scope for cryptocurrencies to make a splash in the market in the long run. With liquidity amiss in the market, companies and hedge-funds are increasingly considering this unique option as a safe bet. Currently, it is not properly regulated but seems extremely viable and competitive at the same time. The ideal way to create sensation in the market is by offering a solution-oriented currency that rectifies the defects of other currencies. Therefore, a cryptocurrency creation is very intriguing, however it can be time consuming as well which can benefit you immensely.