After a decade of explosive growth, cryptocurrency has truly gone mainstream. Aside from the big, established names, new cryptocurrencies launch almost daily. So, let’s look at some of these coins and the process behind launching a new cryptocurrency.
How Are New Cryptocurrencies Made?
One of the unique things about cryptocurrencies is that they run on open-source technology.
Cryptocurrencies can be easily launched because the code of an existing blockchain can be copied instead of building your blockchain from scratch. Modifications can be made as per the builder’s desires, and a blockchain’s code is often copied without change. Then, a new cryptocurrency is being born, with all the same underlying technicals as the original, but it is a distinct blockchain.
Another way cryptocurrencies can be born is via a contentious “fork.” A fork is simply a change in the blockchain’s protocol.
Sometimes, a community can disagree about the direction of a blockchain. If this disagreement fails to be resolved, it can sometimes result in what is known as a fork. This is when the underlying code is tweaked, creating a second blockchain.
A high-profile example occurred with Bitcoin (BTC) between 2015 and 2017. Debates around scalability issues relating to Bitcoin’s design eventually led to a hard fork, creating Bitcoin Cash, a cryptocurrency completely distinct from Bitcoin.
Vitalik Buterin, the creator of Ethereum (ETH), said in a January 2022 tweet, “I would call BCH mostly a failure. My main takeaway: Communities formed around a rebellion, even if they have a good cause, often have a hard time long term because they value bravery over competence and are united around resistance rather than a coherent way forward.”
Today, I call BCH a failure. My main takeaway is that communities formed around a rebellion, even if they have a good cause, often have a hard time in the long term because they value bravery over competence and are united around resistance rather than a coherent way forward.
9. I was optimistic about Bitcoin Cash specifically, because I agreed with the big-blocker arguments in the scaling war more than the small-blocker arguments.https://t.co/PgVHuFGadM
— vitalik.eth (@VitalikButerin) January 1, 2022
Of course, creating a blockchain from scratch is also possible, although this is a far more arduous task.
Aptos (APT) is the most recent example of creating an entirely new blockchain—the Layer 1 crypto was launched a couple of weeks ago by former employees of Meta Platforms.
For those new to crypto, Layer 1 implies that the crypto has its blockchain that can be used as a building block. A few well-known Layer 1 crypto include Ethereum, Cardano (ADA), and Solana (SOL).
Following many boosts surrounding Aptos, it sank in its trading debut. It has faced criticism over its token allocation, with 50% allocated to Aptos Labs Foundation, investors, and core contributors. This distribution of tokens is known as tokenomics and is a primary factor when assessing a new cryptocurrency.
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New Cryptocurrencies on Existing Blockchains
There is another way to launch a new cryptocurrency.
Specific blockchains are designed to host other cryptocurrencies.
Thus, developers can launch new cryptocurrencies on top of these existing blockchains, with the newly created currency referred to as a “token.” A token can act as digital money and not be native to the blockchain in which it operates.
While some tokens with high degrees of customization are launched, which can take time and expertise, others come online with just a few clicks. Launching a token on top of another blockchain doesn’t require technical understanding—simply a few minutes of their time.
Some online services help you launch a new token in minutes.
As of Dec. 18, the number of cryptocurrencies listed on CoinMarketCap had crossed 10,000. Many of these will have been mere copies of existing tokens.
Ethereum-Based Cryptos
The world’s second-largest cryptocurrency by market cap has only been around since 2015.
Despite its youth, Ethereum (ETH) is the most popular blockchain to launch cryptocurrencies. It has become a play area for developers, swiftly expanding to become popular blockchains for decentralized applications and tokens.
You may have heard of some of the popular ETH tokens launched, like the meme token Shiba Inu (SHIB), an alternative to Dogecoin (DOGE); the metaverse game The Sandbox (SAND); and the DAI.
Binance-Based Cryptos
Instead of being launched on the Ethereum blockchain, another popular option is instead the BNB blockchain.
BNB stands for “build and build” and is the blockchain launched by the world’s biggest cryptocurrency exchange, Binance, and contained within the Binance Smart Chain ecosystem.
Proponents of BNB Chain enjoy its lower fees and higher speed. Ethereum’s main criticism is its onerous transaction fees, known as “gas,” which can make it inaccessible to the average user.
But BNB Chain’s lower fees and high speed come with a trade-off. Binance is a centralized company, so users of this chain sacrifice an element of decentralization.
This has led some cryptocurrency “purists” to decry that it goes against some of its core pillars.
The ease, low fees, and high speeds at which cryptos can be launched mean that some extremely speculative assets traded on BNB Chain during the pandemic, especially when the market crashed.
One such example was Safemoon, launched in March 2021. It immediately surged upwards, trading at a market cap of $10.9 billion in May 2021.
However, as with many of these copy-paste tokens, the fall has been just as dramatic. Safemove lost 99.9% of its value, trading close to zero, with a market capitalization of 3.3 million around the end of 2022. According to CoinMarketCap, Safemoon has been migrated to a new version: SafeMoon V2.
The embroiled crypto has also faced accusations of being a Ponzi scam, with its founders controlling large amounts of the token. In addition to fraud allegations, a class-action lawsuit was filed involving celebrities such as Jake Paul and Soulja Boy for participating in an alleged pump-and-dump scheme.
It is a poignant reminder that given the ease with which these new cryptocurrencies can be created, it is essential to stay vigilant.
With new cryptocurrencies, the underlying code can be vulnerable to specific new projects. Chris Zaknun, CEO of blockchain project launchpad DAO Maker,
“Hackers and malicious actors can exploit bugs in the contract code to dupe investors and steal user funds,” Zaknun says. “It is important for investors to verify if a reliable third-party company has independently audited the code.”
Solana-Based Cryptos
Again, it is another alternative that offers speed and lower fees than Ethereum. Again, there are trade-offs, however, as Solana has been blocked with problems regarding its reliability, with a handful of significant outages occurring.
Despite the problems, interest in Solana has risen over the last year, with a growing number of non-fungible tokens (NFTs), apps, and tokens launched on the blockchain.
New Cryptocurrencies to Invest in 2025
- Pepe Unchained
- Crypto All Stars (STARS)
- Base Dawgz
- The Meme Games
- Shiba Shootout
- Mega Dice Token
Should I Invest in a New Cryptocurrency?
Investing in new currencies shortly after launch can be pretty risky.
For many cryptocurrencies funded by venture capital (VC) firms, a public launch is the first chance for the firm to offload liquidity and cash out its investment.
Coupled with the lax regulatory environment for crypto and the often anonymous nature of founding teams, this has led to retail investors being used as exit liquidity in the past. Retailers are subject to being preyed upon, purchasing new tokens only to see the token crash lows as insiders and VCs unleash a wave of selling pressure.
Additionally, the unfortunate reality is that some cryptos are nothing more than scams, launched in just a few minutes via the processes described above. Founders wish they could make a quick buck while cloaking behind the anonymity of the blockchain.
Also read: Best Crypto Exchange in India
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Mudrex is Indian Govt. recognized platform with 100% insured deposits stored in encrypted wallets
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Enjoy zero crypto deposit fees and industry’s best fee rates.
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Listed On Deloitte Fast 50 index, 2022 Best Global FX Broker – ForexExpo Dubai October 2022 & more
Best-In-Class for Offering of Investments
Trade 26,000+ assets with no minimum deposit
Customer Support
24/7 dedicated support & easy to sign up
Cryptocurrencies:
220+ crypto coins available to trade
Users:
10 million plus registered users
Please invest carefully, your capital is at risk
Watch Out for Crypto Scams
Retail investors can also be subject to crypto scams.
“Rug pull” is the slang given to the practice, such is its frequency. This is where developers promote a new cryptocurrency before “pulling the rug” out from investors and running off with the liquidity.
Also, the flip side is true. Even if new cryptos are scams, they can sometimes multiply before the inevitable fall—it is these gains that frequently make headlines and fuel the “fear of missing out,” even if they are the exception.
It must be said that out of the 20,000-plus cryptocurrencies currently on the market, some come online now and then with staying power, if only a minority.
But make no mistake, playing around in these parts is a dangerous game.