As cryptocurrencies become more widely accepted, more and more companies are entering the market by launching their own tokens. Although it is difficult to determine who is behind the world’s most prominent cryptocurrency Bitcoin (the identity of the enigmatic Satoshi Nakamoto has yet to be uncovered), some organizations want to publicize their blockchain initiatives and tokens.
Cryptocurrency and Crypto Token: Is there any difference?
Cryptocurrency is a form of digital asset with a specific value and is intended for use as a medium of trade. Crypto coins are virtual currencies that run on their own blockchains. Bitcoin and Ethereum are good examples.
In this post, we’ll focus on crypto tokens in the context of enterprises. They are fungible and transferable assets that run on the blockchain, which was chosen for the development and execution of Dapps and smart contracts.
So, the main differences are:
- Tokens can only be used for a single project, community, or sphere. Cryptocurrencies are more widely used, and they can be used anywhere.
- Tokens are released on existing blockchains, while cryptocurrencies run on their own.
How to price a token?
It will be easier to price your token if you run your own exchange. Users can buy and sell the token after you have the marketplace in place. You can either set the price yourself and keep it static, or you can create a dynamic market pricing (meaning the price changes according to demand). The more people that buy it, the greater the price of your token will rise. Dynamic pricing works with order books and is the most accurate way to find out how much your currency or token is worth.
You can use a token to entice your users to use the exchange once you have one. Tokens provide new business models and economic prospects based on blockchain technology. This is an improvement over third-party services.
4 Steps to Creating a Crypto Token
You’ll need to employ a qualified blockchain development team now if you want to establish a cryptocurrency token with substantial functionality that’s intimately related to a dApp ecosystem.
STEP 1: DEFINE YOUR TOKEN PROPERTIES
- First and foremost, you must decide on the purpose of your crypto token. If it’s a regular ERC-20 token created to attract investors, it’ll have the intrinsic properties of the ERC-20 standard. On the Ethereum network, the ERC-20 tokens are the most widely utilized. They’re called utility tokens since they’re supposed to be used to pay for services. You’ll be able to choose from the following options:
- Total supply of tokens
- Name, symbol, and decimal number of the token.
- few ancillary services for checking address balances, enabling, and verifying transactions.
If it’s an NFT, the settings will be slightly altered, for example, to designate non-fungible crypto token owners.
STEP 2: DEVELOP A SMART CONTRACT
Every crypto token is governed by a smart contract, which is a piece of software that runs on a blockchain. To generate your token, you’ll need to build a smart contract.
Ethereum, by the way, was the first blockchain to implement smart contracts. That is most likely the primary reason why Ethereum is used to design and distribute cryptotokens. Make no mistake: even if you utilize a token-generating service to create a token for an ICO, they will still write and deploy contracts on blockchain in the background.
STEP 3: RUN QA ON A TEST CHAIN
When developing a standard smart contract for a crypto asset, keep in mind that replacing it in the event of a bug will be a pain. As a result, use a test blockchain like Rinkeby or Ropsten to execute many tests.
STEP 4: DEPLOY TO BLOCKCHAIN
A smart contract’s deployment is straightforward. Your developers may only need to submit a transaction with developed contract code without designating a receiver, depending on the tool they’re using. It’s really simply a matter of a few clicks, and it’s nothing to be concerned about.
In any event, make sure the contract functionalities work perfectly on a test network before releasing it to the mainnet (Ethereum).
We also advocate validating and auditing your smart contract to make it appear more trustworthy to investors and potential clients.
Of course, it is a little more complicated in reality than it appears, but there will be no issues if you have experienced pros on your side.
The production of a token is not a difficult task for specialists. And it may only take a few minutes in some cases. However, keep in mind that the token launch requires you to possess funds on the blockchain where your token will be launched.
Tips for selecting the best blockchain platform
- Check to see if the platform already has all of the functionality you require.
- Check to see if their native token (Ether, ERC20, etc.) has been updated to contain all of the functionality you’re looking for.
- If you’re planning a major update or a big twist to the standard token functionality, make sure it won’t break compatibility with other platforms that implement the standard.
- Ensure that buying tokens from other platforms is no longer required to access platform features and functions.
- Exchangeable tokens can be traded on other platforms.
Conclusion
Of course, it is a little more complicated in reality than it appears, but there will be no issues if you have experienced pros on your side.
The production of a token is not a difficult task for specialists. And it may only take a few minutes in some cases. However, keep in mind that launching a token necessitates storing funds on the blockchain where your token will be run.
Corum8 will love to hear from you if you’re interested in launching your own token.