Career Testing
Career Testing
Career Testing
ENTREPRENEURSHIP / JUN. 09, 2014
version 5, draft 5

How to Make Your Own Digital Currency

bitcoin
gov.uk

Digital currency (aka cryptocurrency) is either going to be the next big, big thing, or the latest in a long string of internet fads that burned bright, fast, and quickly faded. Only time will tell. Bitcoin is the biggest and most well known, but there are actually many other examples, including Litecoin, Dogecoin, and Mastercoin. Most are built upon or connected in some way to Bitcoin and its block chain, which is open source and allows anyone (in theory) to make their own digital currency. But just how exactly do you do that?

Building Upon Bitcoin

OK. There’s good news and bad news. The good news is that virtually anyone can use Bitcoin to design their own cryptocurrency. The source code is open source and available to anyone that wants it. The bad news? It’s not super easy. In fact, unless you have a good grasp of coding and programming language, it’s probably too hard for the average user to do. But, like so much in the world now, there are ways around that. You can outsource by hiring a freelance programmer to do it for you.

1. What’s Your Market?

Most of the altcoins (alternatives to Bitcoin) are designed around a very specific community of people (Offerings for Cthulhu are altcoins for fans of HP Lovecraft...how’s that for specific?!). Most websites suggest that you zero in on a particular community or group of people as the first step in making your own currency, much like you’d identify a target market when launching a new product or service. You could select a hobby you enjoy, favourite animal, an author/singer/actor that you love, a cause you support, or literally anything else that pops into your head. But choose something...your altcoin will need support, and it’s easier to target a specific group of people than the public at large.

2. Code Your Coin

Armed with your desired community in mind, the next step is to create your coin. This is the actual coding, and if you can’t do it yourself, you’ll need to find someone who can. Perhaps the easiest option out there right now is Coingen, developed by Matt Corallo. With it, you can quickly create a custom designed and named altcoin by filling in a few fields of text and uploading a coin image/logo (you can create one yourself using Photoshop or equivalent). The service isn’t free, though. A basic altcoin will cost you 0.05 BTC (about $30 USD at current exchange rates), with several upgrades and tweaks that will add to that total. Hit the “Create My Coin” button at the bottom, and you’re in business.

3. Market Your Coin

Once your coin exists, and you’re designated certain aspects such as how many coins will eventually exist, and how many coins are given as a reward to miners, you need to get the word out there. Altcoins exist only if they are accepted and supported by users. Because you wisely selected a target audience from the beginning, this should be straightforward. You need to market your shiny, new altcoin in the places where your community hangs out online. Create a website that will function as the online home of your currency. The authoritative presence. The safe and secure place to get information and software (such as that for mining your coin) about your coin.

4. List on an Altcoin Exchange

Like more traditional currencies, crypto and digital currencies are traded and purchased on exchange sites. There are plenty of options available (and the list is growing along with the number of altcoins). Your target markets needs a place to get your coin, so check out the exchanges and follow their individual instructions for getting a new currency listed with them.

A quick word of warning...digital currency exchanges have a history of collapse, failure, and fraud. It would be wrong to say that they are all bad and unreliable, but the nature of the service means it is subject to hacking, unscrupulous practices, and so forth. You should never have more in one exchange than you can afford to lose. Plan for it, hope that it never happens, but better safe than sorry, right?

Coins-E is an example of an exchange that lists a high number of altcoins.

That’s the basics. Anyone can create and market their own digital currency with a few steps. Obviously, if you do the coding yourself (or hire someone to do it for you), you have a lot more control over every element of its creation, rules, and rewards than if you use a quick creation site like Coingen.io. The digital currency universe is fast moving and exciting at the moment, but it does carry with it a lot of risk. Tread carefully.

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