How to Build a Cryptocurrency Like Bitcoin or Ethereum

Cryptocurrency is rising ultimately; by April 2025, there were over 17,134 cryptocurrencies and over 560 million cryptocurrency users globally. Since it is evolving rapidly, roughly 18,000 businesses are now accepting a form of crypto as payment.

Considering this, are you looking forward to building a cryptocurrency like Bitcoin or Ethereum? It might sound overwhelming, but you must be aware that they just don’t happen overnight.  

They typically build with vision, innovation, and a lot of code. Since digital currency is becoming a new way of making money, creating your own cryptocurrency is not a bad idea. 

Whether you want to power a new DeFi platform, create a new payment option, or simply experiment with blockchain technology, building a cryptocurrency can open the door to innovation. But a big question comes: where do you start? 

This guide will break down the entire process, from understanding blockchain basics to launching your mainnet. You can turn your crypto idea into reality. 

Learn the Basics of Blockchain and Crypto

You’re browsing how to build a cryptocurrency; before that, you must understand blockchain and crypto. 

Blockchain

In this modern world, blockchain is an advanced technology that typically operates as a distributed and decentralized digital ledger. Unlike traditional databases, where a single authority often stores information, blockchain stores information collectively, making it transparent, secure, and resistant to tampering.

Crypto

Coming onto the crypto, typically built on blockchain technology, cryptocurrency is a digital or virtual currency secured by cryptography. Unlike traditional money issued by the government, these currencies operate on decentralized networks, making them secure, transparent, and resistant to censorship.

See Related: What is a Cryptocurrency?

After understanding the basics of blockchain and crypto, one thing is clear: cryptocurrency is a key application of blockchain technology. By utilizing this technology, you can build a cryptocurrency like Bitcoin or Ethereum and offer users a secure and transparent way to record and transfer value.

Define the Purpose of Your Cryptocurrency

Let’s begin your cryptocurrency development by solving a purpose. So, first, you need to identify why you’re building cryptocurrency since there are thousands of existing ones, and then why you’re your own. Further, clarify whether you want a digital coin or a token. 

Thus, to find your answer, here are some must-consider conditions you can look for:

Identify the Problem: Firstly, ask yourself, what issues are you trying to solve? Are current cryptos too slow? Too expensive? Or lack of privacy?

Decide on the Use Case: For simple understanding, you can also choose to identify based on use cases, like

• Payment
• Smart Contracts & dApps
• Privacy
• Gaming/NFTs
• DeFi

Define Your Targeted Audience: The next thing you need to consider is who will actually be your audience? Businesses, individual traders, developers, or a particular niche? 

Set Clear Goals: Are you thinking of creating a community project, a startup solution, or an investment vehicle? 

By acknowledging these conditions, you can define your purpose for building a cryptocurrency. 

Choose Between a Coin or a Token

After defining your goal, another core decision you have to make is what you would like to build: a coin or a token? Let’s make it easier for you! 

What is a Coin?

It is a form of cryptocurrency that runs on its own blockchain, such as Bitcoin and Ethereum. 

If you choose to build a coin over a token, then you will gain some amazing benefits like

• Complete control over the blockchain’s rules, features, and upgrades. 
• Higher level of independence, no reliance on other networks. 

However, for every good thing, there are some disadvantages also, so

• Comparatively, it is more expensive and time-consuming to build.
• It further requires more developers, infrastructure, and security management. 

Expert Advice: Build a coin if you want to create a brand-new blockchain ecosystem. 

What is a Token?

Unlike a coin, a token is built on top of an existing blockchain, like Ethereum and Solana. Some of its primary examples include USDT and Uniswap.

If you choose to build a token over a coin, then you will get advantages like

• Faster and cheaper to launch.
• No need to build or maintain your own blockchain.
• Access to an existing ecosystem. 

However, talking about its disadvantages:

• Limited by the rules and scalability of the host blockchain
• Often less flexible compared to running your own chain. 

Expert Advice: Build a token if you want to launch a crypto project quickly without reinventing the wheel.

Based on the following information, you can easily identify whether you want to build a coin or a token. 

Select a Consensus Mechanism

Next, you are required to pick the right consensus mechanism. Basically, it is a set of rules that defines your blockchain agreement on every transaction state. It further ensures that all the nodes have a constant view of the data, which is crucial for maintaining trust and security.

Let’s select the best consensus mechanism for your blockchain:

A. Proof of Work: 

Proof of Work is a well-recognized consensus mechanism. If you choose this mechanism above others, you will typically require miners to address challenging issues using significant computational power. 

Further, this process validates transactions and adds them to the blockchain. Through effectively protecting the network, PoW uses a lot of energy, which results in higher costs and a larger environmental impact. 

B. Proof of Stake:

Proof of Stake is an energy-efficient substitute for PoW. In this system, validators are chosen based on the number of coins they hold and are keen to “stake” as collateral. This result, the need for comprehensive computational power, makes it a more overgrown option. PoS further strengthens security while offering a more viable approach to transaction validation. 

C. Delegated Proof of Stake:

DPoS takes the PoS model a step further. Here, stakeholders typically vote to elect delegates who will confirm transactions on their behalf. Also, this mechanism is comparatively faster and more scalable. It further enables the network to process transactions smoothly, making it an ideal option for projects that value speed and efficiency. 

6. Design Tokenomics and Features

Now, coming onto tokenomics and features, a cryptocurrency’s tokenomics is the blueprint for its economy, including how tokens are created, distributed, and used. Good tokenomics can attract users, investors, and developers; moreover, poor tokenomics can sink even the most promising project. 

Let’s understand what you need to consider:

• Total Supply: Decide if it’s fixed or inflationary. 
• Distribution: Choose how the token will be shared, pre-mined, mined, staked, or airdropped. 
• Utility: Give your token a purpose. 
• Incentives: Reward users, miners, or validators to keep the network running. 
• Governance: Decide who makes decisions, you or the community. 
• Fees & Burns: Set transaction fees and consider burning tokens to increase value. 

In addition to this, consider keeping it fair and transparent because good tokenomics builds trust and drives adoption. 

7. Develop Your Cryptocurrency

This is the state where your idea of building cryptocurrency will turn into an actual project. So, let’s break it down: 

Step 1: Set Up the Development Environment: 

First, you must install all the required crucial tools, libraries, and blockchain frameworks. 

Step 2: Write or Fork the Code: 

Next, you need to write or fork the code based on your cryptocurrency choice. If you choose to build a coin, write a new blockchain protocol from scratch, whereas, for a token, simply write down a smart contract that defines the token’s rules. 

Step 3: Build Waller Support: 

Once you’re done with coding, you must create a wallet that enables users to send, receive, and store your crypto safely and transparently. 

Step 4: Set Up Nodes & Network Infrastructure

After building your wallet, you are required to configure nodes to validate transactions and keep the network running. 

Step 5: Test Core Features

Lastly, ensure your transaction, consensus, and block generation work perfectly before it goes public. 

8. Launch a Testnet

Once your cryptocurrency is fully developed, you’re first required to execute a trial version of your cryptocurrency’s network before making it live in the market. It is a safe place to experiment before going live. 

However, through this testing, the testnet will discover: 

• Bugs: Test transactions, smart contracts, and features without risking real funds. 
• Network Performance: See whether blocks perform smoothly, nodes are syncing, and everything performs as planned. 
• Community Feedback: Let developers and users try your network and report the issues.
• Security: Spot vulnerabilities before a hacker can. 

Once your testnet runs smoothly and feedback is addressed, your crypto is ready to launch on the mainnet. 

9. Deploy Your Mainnet and Infrastructure

Once your testnet is stable and bug-free, it’s time to go live, and this is called launching your mainnet. Here’s what happens during this stage: 

• You will release the real version of your blockchain or token, so transactions now have real value. 
• Allow miners or validators to join and secure the network.
• Share them with your community through airdrops, pre-sales, or staking rewards. 
• Launch wallets and a block explorer so users can view transactions and balances. 
• Make it easy for others to build apps, dApps, or services on your network. 

Thus, this is the step where your cryptocurrency becomes real. It is the official launch that permits users to interact with your network in a live environment. 

10. Ensure Security, Compliance, and Growth

As your cryptocurrency is live, it doesn’t mean your work is over here. From now on, your real work starts. Since your crypto coin or token is live in the market, it is mandatory for you to provide users with security, compliance, and growth. 

Security

After your crypto is live in the crypto market, consider conducting code audits and penetration testing to find vulnerabilities. Monitor your network regularly to detect attacks, and keep your nodes, wallets, and smart contracts updated. 

Compliance

Along with security, you are also required to comply with regulations like KYC and AML, especially when your crypto will be traded publicly. Further understand the legal requirements in your target regions to prevent penalties or shutdowns. 

Growth

Talking about the growth, then building a strong community, publishing a whitepaper, and working on exchange accessibility and liquidity management in exchange will definitely lead to growth. 

Conclusion

To conclude, in this comprehensive guide, we have discussed crucial information related to how to build a cryptocurrency. From the basics of blockchain to the difference between a coin and a token and other step-by-step processes, this guide will help you build a future-ready cryptocurrency that will be as brilliant as Bitcoin and Ethereum. 

Nonetheless, building a cryptocurrency is not that tough if you take guidance from experts like Technoloader. Choosing us as your partner will not only provide you with expert assistance but also ensure you will receive end-to-end solutions with a customized trading platform and on-time delivery that is truly worth the money.