How much does it cost to start a Cryptocurrency?

The most comprehensive technology rocking the digital world for the past couple of years is cryptocurrency. It has come to change the traditional attitude to money and the whole behavior built around money. Being on the edge of the latest trends, we couldn’t pass by the technology. As the biggest nerds in creating new solutions, our primary goal was to find out all the aspects and factors that affect the cost of starting a cryptocurrency.

What is cryptocurrency?

The digital currency called cryptocurrency exists online and does not have a physical form. Still, it does exist in a blockchain that stores crypto transactions and enables direct peer-to-peer payments. The critical point here is that information about transactions is saved without any identifying factor. Cryptocurrency is out of federal bank and government control. It is also not controlled by any other traditional lending institution.

What are the key features of cryptocurrency?

Cryptography

Through complex algorithms, cryptography converts plain text into unintelligible text and vice-versa. Encryption is part of cryptography, but it is only one part of the science. Cryptocurrencies use advanced cryptography to secure communication and encrypt data. Based on a complex algorithm, cryptography uses two main elements in cryptocurrency — digital signature and hashing.

A digital signature is used to sign monetary transactions. It also proves that the account owner owns that piece of encrypted information.

Hashing is responsible for the structure of blocks in a blockchain. It encodes people’s accounts and transactions.

Blockchain technology

The decentralized public ledger (blockchain) hosts and saves transactions grouped into blocks. Every new record in the blockchain is saved and cannot be changed.

Block mining

The process of attaching new records to the blockchain is called block mining. Through specific software, it is possible to produce new crypto coins.

Why do you need to start thinking about creating a cryptocurrency?

Before starting with your cryptocurrency, it is wise to feel the soil of the global cryptocurrency market and learn the future trends.

The global cryptocurrency market valued at $1,423.95 million for 2020 is predicted to register $2,018.48 million by 2025 at a CAGR of 7.22%. The global market is still led by Bitcoin, which has registered a value of $57,000 per coin. The second popular unit is Ethereum, followed by Polkadot, Tether, Binance Coin, and Cardano, with a combined value of $422 billion.

The market moves mostly depend on demand and supply. Cryptocurrency is free from most economic and political concerns. It means the market may not react to the changes. Still, some factors move the market.

  • Supply: the total number of coins and tokens with the rates they are released.
  • Market capitalization: the value of all existing coins.
  • Media: the way cryptocurrency is presented and the scale of coverage.
  • Integration: the scale to which the cryptocurrency integrates into other technologies or infrastructures like e-commerce.
  • Key events: major news and events in the segment like security breaches, regulatory updates, or economic setbacks.

Investing in a crypto coin is one thing but creating your cryptocurrency is a new business perspective with its apparent benefits.

Financial flexibility. Being out of the control of any financial institution, cryptocurrency has absolute financial flexibility that can be aligned to business needs.

Business branding. Having your cryptocurrency is beneficial not only in terms of privacy but also in terms of adding brand value and gaining an edge over competitors.

Launching crowdfunding campaigns. Own tokens can help to reach out to investors interested in a project or launch crowdfunding.

Security and savings. Using cryptocurrency is safe but having your coin gives you vast space to act and manage transactions.

What do you need to create a cryptocurrency?

To understand how to start with cryptocurrency and how much it costs to create a cryptocurrency, you should first begin defining the business purpose of having your own crypto coin. The following steps are:

1. Considering the legal implications.

2. Defining project budget

3. Hiring a professional development team

4. Hiring external auditors for security audits

5. Promote the project

Project Conception & White Paper Development

  • The whitepaper should be in PDF format.
  • The white paper should be two versions: a light version with 2–8 pages and a regular one with 20–100 pages.
  • Good grammar
  • The whitepaper should be in multiple languages. Recommended languages are English, Spanish, Mandarin, Japanese and Korean.
  • It should cover the following questions:
  • What is your idea?
  • Why does the market need your idea?
  • What are the ICO funds to be used?
  • When is the release date?
  • When will the project be completed?
  • What is the expertise of your company?

Handle Legal and Financial Matters

Common legal issues related to cryptocurrencies are the following

  • Contractual issues
  • Jurisdictional issues
  • Financial fraud
  • Money laundering
  • Tax implications
  • Legal and regulatory concerns
  • Intellectual property

Algorithm & Technological matters

ICO & IEO

IEO is also a way of fundraising practiced by start-ups for selling new cryptocurrencies. The difference is that IEO involves crypto exchanges to raise funds. Investors can buy new tokens before they are released to the market and benefit when the price gets higher.

Cost of Creating A New Cryptocurrency

Like any other type of product development, the cost depends on the components included in the product. The more complex the process, the higher the price.

Here is a rough estimation of costs for creating a currency by stage duration and price.

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