Digital artist Beeple received $69 million for one NFT painting in 2021, while large American bank JPMorgan Chase conducts a billion banking transactions every day using its own cryptocurrency.
Digital assets help artists, startups, and companies simplify payments, promote their creativity and services, and, of course, earn money.
Let's examine all the opportunities cryptocurrency, tokens, and NFTs open up, how to create them, and whether it is worth it.
What's the difference between cryptocurrency, tokens, and NFT
Cryptocurrency is digital money that can be used for savings or everyday payments. Any cryptocurrency operates on a blockchain, a chain of blocks with information about transactions that is simultaneously stored on thousands of computers around the world.
In general, cryptocurrency is a universal label for digital assets. We can use the word “coin” as its synonyms. People use the word cryptocurrency to name digital money that operates on its own blockchain: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Dogecoin (DOGE).
A token, in turn, can run on another project's blockchain. It also has value, but it is not necessarily used as money. You can find management tokens that are needed for voting inside the project's ecosystem: one coin, one vote. There are also reward tokens, dApps tokens, and even liquidity pool tokens, each with its own purpose.
A non-fungible token (NFT) is a separate category of token. It is an equivalent of digital rights that can confirm ownership of a picture, song, video, or document.
If the words "cryptocurrency," "token," "coin," or “altcoin” confuse you, don’t worry. Read our article “Cryptocurrency vs. token: what's the difference?” to dive into the terms and technical features of cryptocurrencies and learn how to use them.
Why would someone create cryptocurrency
Cryptocurrency is a fiat rival—a common alternative. In comparison with classic money, crypto runs on the blockchain, so settlements occur without banks and other third parties. The cryptocurrency supply and operating rules are determined by the issuer—the one who issues this coin.
Cryptocurrency creation involves developing of an entire blockchain first. Only professional developers can handle this task. That explains why cryptocurrency development solve complex problems.
1. Cryptocurrencies implement innovative ideas. The creator of Bitcoin, Satoshi Nakamoto, wanted people to be able to save and use money without the government being involved. He launched cryptocurrency mining industry and released crypto community.
Another innovative idea came from Vitalik Buterin, who created Ethereum, a technically more advanced cryptocurrency than Bitcoin. It runs on smart contracts and allows you to run your own projects and tokens on top of it. To do this, developers simply set the necessary conditions in a smart contract, which is executed automatically. Cryptocurrency design and tokenomics can vary, as well as smart contract integration process and cryptocurrency wallet setup features.
2. Cryptocurrencies make other cryptocurrencies easier to operate. This is how Polygon was born. It solves the Ethereum blockchain's overwhelming problem. Polygon conducts first-layer blockchain (Ethereum) operations by itself. Blockchain development can be vary too.
3. Cryptocurrencies provide hype. Dogecoin is a crypto project based on the Shiba Inu dog meme. The developers wanted to make fun of Bitcoin and show how easily any cryptocurrency, even a meme one, can become popular, but the prank got out of control. Now DOGE is among the top 10 most capitalised cryptocurrencies, with Tesla creator Elon Musk as a top fan.
Steps to create cryptocurrency are starts with basic programming. Cryptocurrency coding is not for beginers. If you out of funding, consider initial coin offering (ICO).
Three reasons to launch token
Tokens perform simpler tasks than cryptocurrencies and do not require a new blockchain. They can reflect the value of other assets (US dollars, euros, or ounces of gold), or they can have intrinsic value (used for payment or voting rights). They are usually created on Ethereum, as it started after the ETH token hype in 2017. This platform is perfect for creating digital currency.
1. Tokens are used for setting up a payment system within projects. This is what the developers of the Decentraland metaverse did: they offered users the MANA token so that they could run settlements within the digital space. Digital asset creation was targeted. That is why cryptocurrency ecosystem is so well- settled.
2. Tokens help manage projects. The decentralised Maker protocol has such a coin, which gives users loans and allows them to earn money on deposits. Its developers have launched the MKR governance token, which people can use to vote.
3. Tokens make it easier to invest in expensive assets. Tokenization allows you to buy an asset not entirely but in parts. The Andy Warhol case provides a good example. Thanks to tokenization, investors were able to purchase parts of his paintings. Prices for lots started at $250, although the paintings themselves cost thousands of dollars.
Cryptocurrency token creation is less complicated than developing a cryptocurrency. Building a digital coin this way does not involve deep programming knowledge.
What are the benefits of NFTs
A non-fungible token can also be created without development; all you need is an unusual idea or an existing piece of art. The NFT price reflects the value of the artist and his work, as well as the rarity of the tokens. For example, the cost of the scarce CryptoPunks tokens can reach tens of millions of dollars.
NFTs are created on ready-made blockchains, most often on Ethereum, Polygon, or Solana.
1. NFTs help sell art. Artists, musicians, and other content makers sell paintings, songs, and installations in NFT format to popularise their projects due to the hype around NFT. The scheme also helps them make money. The artist Beeple picked this line, and now his digital paintings are selling for millions of dollars.
2. NFTs establish ownership and protect copyright. They can be compared with a digital certificate for what is “wrapped” into a token—a picture, video, or track. When an NFT is created, thousands of computers around the world record information about the new token and its owner within the blockchain.
This is what singer Justin Bieber did with the track "Company"—he wrapped it into an NFT and issued 2000 copies. Token owners received the right to a portion of the royalties from the track's streaming.
3. NFTs are used for viral marketing campaigns. For example, Nike releases NFTs of sneakers. Token owners can exchange them for real ones in the store.
Another striking example is the German airline Lufthansa, which opened an NFT loyalty programme and gives bonuses for flights in NFT. Tokens can then be exchanged for free Wi-Fi, access to the VIP area, and other amenities.
Creating an NFT is much easier than launching a token or cryptocurrency. All you need are pictures for future tokens, a few dollars in your crypto wallet account, and some free time. By the way, we have prepared step-by-step instructions that will help you create your own non-fungible token in just 5 minutes!
Creating blockchain-based currency or token: is it a good idea?
Digital assets are gradually entering our lives through viral marketing campaigns, hyped news headlines, and even everyday banking transactions. If you have a business or are involved in art, it is definitely worth trying to create your own cryptocurrency or token. It helps, at least, to promote your brand and, at most, to earn money.
Even if you do not have a startup, this will be valuable experience that may come in handy in the future, when the share of digital assets in the financial market grows.
If you wondering about how to make your own cryptocurrency or token, start with discovering blockchain technology.
Subscribe our Telegram channel to stay updated on the hottest news about Bitcoin!
🤔 Have you ever tried to launch a token or an NFT collection?
💌 Telegram, Twitter, Instagram, Facebook
Here are three other cool articles:
What is a spot bitcoin ETF, and why does everyone talk about it
What’s wrong with Binance Web3 Wallet
BitVM to make bitcoin smarter than altcoins
This article is not an investment recommendation. The financial transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
