Cryptocurrencies can be complicated, even for veterans in the field. But did you know that you can create your own token right from your own web browser? Creating tokens using the traditional method requires a specific set of advanced programming skills that most people simply do not possess. But the playing field is changing, and by utilizing the technologies readily available online anyone can try their hand and create the tokens they’ve been dreaming of. Here’s how!
Token 101: The Basics
It is no big secret that the terminology in the cryptocurrency world is a bit muddled, and for someone peering in from the outside, this vast array of vocabulary can seem a bit daunting. For now, though, we’ll focus on tokens, which are defined as the currency that a project is built on the Ethereum network as a means to raise funds to fuel the aforementioned project. On Ethereum, tokens are also known as smart contracts that are intended to digitally facilitate, verify, or enforce the negotiation or performance of an agreement. You probably know that the Ethereum network is open to everyone, so do you know who is allowed to create tokens?
[bctt tweet=”Do you know who is allowed to create Ethereum tokens?”]
Anyone can create tokens
The only thing that is stopping them is technical knowledge, knowhow, and a small barrier of network costs. Sure there is plenty of freely available code you can find and copy to create your token, as well as a handful of quality guides you can follow, but one slipup, one typo, and everything comes crashing down. Not to mention that you’ll have to figure out the network cost (gas if you’re using Ethereum) and fuel your project appropriately. It seems daunting, but do not fear; there are easier ways than learning Solidity. The first step, however, is to decide what you want to use your token for.
Three primary uses of tokens
In relation to an Initial Coin Offering (ICO), tokens can serve three primary purposes, each one classified under a different name. If a token’s purpose is to sell a piece of the company, much like a stock, then it is an Equity token. If the token is backed by a tradable good, such as gold, real estate, storage space, etc., then it is known as a Security token (these are often more heavily regulated because they are more similar to fiat currencies). Last, but not least, is the Utility token that provides access to a specific product or service. Depending on the token classification, knowing about the relevant laws in association to tokens is very important since regulations change quickly.
The Howey Test
Research can begin by using this data on regulations from December 2017 as a starting point, but researching specific country regulations is highly encouraged. In the United States, the SEC has ruled on ICOs using the Howey Test, declaring that almost all ICOs are securities and need to be taxed and regulated as such. The term “utility” when used in the United States is used as an organizational distinction, not a legal declaration. Issuing tokens is currently completely legal in the United States, but make sure to implement KYC/AML standards. Before you can start worrying about adhering to regulations, however, you are probably wondering what you need to know in order to create your own token.
Preparing Your Tokens for their World Debut
Creating a token that will exist on a blockchain will implement itself depending on the smart contracts that govern it. Understanding the inner workings of how this works isn’t necessary, much like you don’t have to be an auto mechanic in order to operate a vehicle. Tokens exist on the blockchain with their data spread and confirmed across many digital ledgers, called nodes. They use the blockchain’s computing power to function, and any tokens that are owned by individuals are attributed to personal (and secure) wallets.
[bctt tweet=”Creating a token doesn’t require understanding the inner workings, much like you don’t have to be an auto mechanic in order to operate a vehicle”]
Although it’s not necessary to understand how the underlying Solidity code works when using point and click token creators, it’s a good idea to have a method to export it and have it verified or audited. This provides a secondary set of eyes to ensure everything is set up correctly and that there are no security or fraud concerns.
Real-world token examples
Now that you have a basic grasp of the underlying technology, let’s move on to a few examples of tokens and their uses. You will typically see tokens being used in three different situations, and although they share a similar function, this may just spark your mind and inspire you to create your bright idea.
- General tokens are used along the traditional definition of the word, as a placeholder that can be exchanged for goods or services.
- ICO tokens are startup/company specific and are typically restricted to the specific goods that the company may offer, whether that be computer storage space, platform services, or something else. Keep in mind that if a product has yet to be developed, the token will be considered a security in most major jurisdictions.
- Exchange tokens exist on a database that is typically kept in cold storage and run by a company like Bitfinex and Binance. It is possible to keep tokens on an exchange, or you can keep your tokens in your own personal wallet (whether that be digital or cold).
5 key parts when creating your token
If you are creating your token the simple way, which is through your browser, then there are only five things you have to decide on right now.
- Name – What will your token be called? This name doesn’t have to be unique, once you launch your token it is set. Search for your chosen name ahead of time to ensure you won’t lead your investors to confusion.
- Symbol – Similar to a stock symbol, the symbol here can be customized to fit your token. This also isn’t unique, but don’t worry, you can provide direct links to your project.
- Supply – Determine the quantity of your token to be created during your ICO. Once you launch, this is a set number and it can be any number you choose.
- Decimals – How small of a fraction of your token will you offer, or will you only sell it in whole numbers? There are benefits to both depending on what the purpose of your token is.
- Price – You have to set the initial token price when offering it on the market. You can change this during different stages of your sale if you wish. Think of the price the same way you might think about the initial stock price in a traditional IPO.
You’ve got the information, now what?
How do you piece it all together? Do you now go learn how to code, develop your own blockchain, create your security protocols, and launch hoping that you made no mistakes? That is an option, of course, and all the power to you if you have the energy and time to do such a thing. However, the rest of us will probably seek an easier path, and what could be easier than being able to launch your token straight from your browser, utilizing a well-designed GUI to point-and-click your way to token creation?
[bctt tweet=”What could be easier than being able to launch your token straight from your browser?”]
Create and Distribute Straight from your Web Browser
Seems like a dream come true, right? If you are seeking simple token creation, this is the perfect route to take. But if you want to launch the next Filecoin or Tezos, it might be better to develop a team and go from there.
CoinLaunch – Coin creation simplified
When it comes to creating a token in your browser, CoinLaunch makes it absurdly simple. For even the most technically inexperienced, we’ll walk you through the stages to make sure that you are live in no time. First we’ll create your token, breakdown the costs, and then explore additional functionalities like running a crowdsale, issuing a direct exchange contract or exporting the code to use it in your project. Head on over to the CoinLaunch Coincreator and start creating your token.
Creation begins with Metamask, a wallet for Ether. A convenient popup makes it easy to download, install, and set up the Metamask extension when visiting the CoinLaunch Coincreator. Next, you’ll want to make sure you are operating on the testnet in Metamask so that you are using fake test ether instead of real ether. On the mainnet you’ll be using real ether, which can become expensive when testing.
After you’ve got Metamask set up, start working your way down the fields. As we have addressed the Name, Symbol, Supply, and Decimal fields previously in this article, those definitions apply here. If you don’t want to host a crowdsale, make sure that the “Apply Token Only Contract” box is checked.
This feature allows you to issue tokens for various utility uses such as rewards or event tickets, but also for things like shares or equity in traditional assets, startups, venture funds, and even real estate. Keep in mind that if a crypto token derives its value from an external, tradable asset that it is classified as a security token and becomes subject to federal/international securities regulations. So be careful when issuing tokens that might be considered a security.
[bctt tweet=”Use your own tokens as rewards, event tickets, shares or equity in traditional assets, startups, venture funds, and even real estate”]
Defining the token details
At this stage you’ve decided on your token name, symbol, supply, price, and decimals. These five attributes define the majority of your token and you are ready to move forward. Remember that the name you chose, as well as the symbol, are not unique; if you are running a test, don’t use your primary name/symbol, instead add TEST at the end of them.
(NOTE: MAKE SURE YOU ARE ON THE TEST NETWORK THROUGH METAMASK) Once you are live, you won’t be able to make any changes; the contract will be sealed in. Verify all of your details here, and if anything looks incorrect, make sure to stop and fix the settings.
Creating a token sale through CoinLaunch is free, but there are costs associated with the process. In order to fuel your token you will have to pay gas, and those costs will depend on how many tokens you are selling and the current price of gas; this fee goes to the nodes that are maintaining the network. There are gas calculators available to easily calculate potential costs, such as ethgasstation.info.
Deploying your tokens on the Blockchain
By clicking “Deploy Token Only” from the Contract Actions panel, you’ll deploy your contract and your tokens will be live. Verify all of your details here, and if anything looks incorrect be sure to stop and fix the settings. (NOTE: MAKE SURE YOU ARE ON THE TEST NETWORK THROUGH METAMASK)
After you’ve gone through your test run and you’re feeling ready for the real thing, you can switch your metamask back to the mainnet so that you can create tokens that can be traded for real currency.
ICO and Exchange contracts
CoinLaunch also provides the ability to launch the crowdsale directly on their platform. All tokens created to be ERC20 compliant, which means that they can eventually be traded on a variety of exchanges. However, when you first launch, CoinLaunch provides an environment for investors to discover your ICO, decide if they want to fund it, and even experience a demo if you’ve provided access to one.
Another interesting feature is the ability to issue direct exchange contracts. This capability helps manage the direct purchase, donation, or transfer of utility or security tokens through a peer-to-peer exchange contract. Basically, it allows you to enable a direct payment gateway for users who might want to buy your tokens directly from you. To give you an example of how this works, imagine that your token is worth .001 ETH and a buyer sends you 1 ETH. They would then automatically receive 100 tokens in return. It’s a pretty cool feature and it allows users who aren’t on the exchanges an easy method to getting started.
Contract export and verification
One last great feature is the ability to export your contracts for verification on Etherscan (a popular block explorer for Ethereum) or for auditing. You can enable this by clicking the “Export Contract” option when deploying your contracts. Once deployed, the Export button will allow you to copy the contract and use it for enhanced features on Etherscan’s website.
With any flourishing market, there are competitors and alternative resources one can use to achieve their goals. Waves allows users to create tokens and trade them on their platform, but unfortunately these aren’t ERC-20 based and cannot be traded on other exchanges such as Binance or Bitfinex. However, owning Waves currency does open up the Waves ecosystem to you, which provides numerous benefits. Bitshares, a similar company, also allows for token creation but all trading takes place through their currency (BTS), meaning you are stranded if BTS plummets in cost; this is unlikely though, since they strive to provide price stable cryptocurrencies.
Putting it all together
Creating a token may seem daunting, but following the aforementioned steps and utilizing the right resources can open up the possibility to anyone. Regardless of why you want to launch your token, utilizing CoinLaunch will leave you with an ERC-20 token that has the potential to be traded on a variety of exchanges. Just remember to check local regulations and restrictions, verify that you are following all laws, and perfect your skills using testnet before you launch a coin using real ether.