Interest in cryptocurrencies has increased significantly over the years. In 2018, there were 18 million identity-verified crypto wallets worldwide; in 2024, that number grew to 617 million.
While more people own cryptocurrencies, enough is still not known about crypto tokens. According to crypto exchange, Presmit some of the most common questions about crypto include what crypto is, how to invest, how to buy, and how they are made.
How cryptocurrencies are made is the ninth out of the top 10 most googled cryptocurrency questions. According to a16z crypto, it is also one of the most common questions founders ask.
However, creating cryptocurrencies can be a difficult or a simple ordeal depending on how you choose to go about it. Also, how you choose to go about it depends on how well you understand cryptocurrencies and how they are made.
What are cryptocurrencies?
Cryptocurrencies are digital currencies that use blockchain technology to enable secure, decentralised transactions without the need for a central authority.
Imagine it has a kind of money that a central bank does not control but by thousands of computers that make sure the set of rules created for it is always upheld and never fails.
Bitcoin, for example, has a set of protocols that it follows. This means that while the Bitcoin network was created by a group of people, it is not owned by any one person.
Note: There are digital currencies created on private blockchains that are completely owned by the entity that created them and have limited decentralisation. An example is central bank digital currencies (CBDCs) such as eNaira created by the Central Bank of Nigeria (CBN).
Bitcoin, introduced in 2009, was the first cryptocurrency and remains the most well-known today. Since then, thousands of cryptocurrencies have emerged, each with unique features and uses.
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How to create cryptocurrencies
To create your own cryptocurrency, you need to first decide why you're creating it and what you want it to do; this will determine the difficulty level of the creation. From cryptocurrencies created for fun — memecoins for example — to those created as a the native token of a blockchain network like Ethereum, the processes are different.
Your options are to:
- Create your own blockchain and cryptocurrency
- Duplicate or modify an existing blockchain (forking a blockchain)
- Create a cryptocurrency token on an existing blockchain
How to create your own blockchain and cryptocurrency
To create your own blockchain and cryptocurrency, you need extensive technical knowledge. This is basically creating a BitcoinEthereum network so you sort of need to have the same skills Satoshi Nakamoto (Bitcoin's creator) and Vitalik Buterin (Ethereum's Co-founder) have.
You need to be not just good, but prolific on smart contract development: Understanding how to write, test, and deploy smart contracts that enable decentralised applications (dApps).
Database management: Knowledge of data structures and algorithms to manage the decentralised ledger effectively.
You also need to know enough about consensus mechanisms such as proof-of-work (PoW), proof-of-stake (PoS), or other consensus algorithms to decide how your blockchain will validate transactions.
(PoW) for example, is a consensus mechanism where miners compete to solve complex mathematical puzzles to validate transactions and add a new block to the blockchain. In Bitcoin, miners use computational power to find a specific hash value, and the first to solve the puzzle is rewarded with newly minted bitcoins and transaction fees.
But if all these aren't your cup of tea, there are simpler ways to go about creating your own crypto token.
How to create your crypto token and blockchain by modifying existing blockchains
Creating your own crypto token and blockchain by modifying existing ones is a straightforward way to get started without building everything from scratch. Many popular blockchains like Ethereum or Bitcoin are open-source, meaning their code is publicly available for anyone to use and adapt.
You can "fork" (modify) an existing blockchain by copying its code and making changes to suit your needs.
After modifying the code, you'll need to set up nodes—computers that run your blockchain and validate transactions. This ensures your blockchain operates smoothly as a decentralised network. Once your blockchain is running, you can create your own token on top of it, defining its purpose and use cases.
If this still sounds difficult, there's an even simpler way to create your crypto token
How to create your crypto token on an existing blockchain
This is the easiest way to create your very own crypto token, and it is perhaps how many celebrities and individuals create their tokens. What you need is to go to a platform that helps create crypto tokens.
These platforms — pump.fun, Bitbond, and Cointool — can hlep with creating crypto tokens in as little as 10 minutes.
However, you still need to know something about the crypto space. For example, you have to decide which blockchain you want to create your token on. This means you need to know the pros and cons of the blockchains.
You could consider some factors like transaction speed and scalability of the blockchain, as this affects how efficiently your token can be used. Look into the fees associated with transactions on the network—some blockchains like Ethereum are widely used but can have high fees, while others like Binance Smart Chain are more cost-effective.
While these might be the easiest way to create crypto tokens, you still need to do some research. Once you have this part figured out the next thing is to get to creating the tokens.
Note: Platforms like pump.fun are for creating memecoins and they are a lot simpler to use.
Legal considerations
Globally, regulations around cryptocurrencies aren't completely spelt out. Even if they are, enforcing them is almost impossible because of the decentralised and anonymous nature of cryptocurrencies.
However, countries like Nigeria have working guidelines on how to launch crypto tokens.
According to Nigeria's Securities and Exchange Commission's (SEC) rules and guidelines for all crypto and digital asset service providers issued in 2022, any business or entity looking to conduct an initial asset offering or initial coin offering (ICO) in Nigeria or targeting Nigerians to submit an assessment form and a draft of its white paper — an informational document that contains why a token is being created a roadmap, and incentive for investors.
However, these rules still aren't clear enough, which makes following them difficult, leading to the creation of many scam tokens.
This is why doing your own research is important when it comes to crypto investment. But as a creator, it is even more important to create a safe market for investors, build tokens responsibly.
