How New Cryptocurrencies Are Created: Bitcoin & Ethereum Explained
Cryptocurrency is one of Google’s hottest search topics, and one question keeps trending: “What is the process of creating new cryptocurrency coins?”
The answer depends on whether you’re talking about coins (like Bitcoin) or tokens (like those created on Ethereum). Here’s a simple breakdown.
Coins vs Tokens: What’s the Difference?
Coins run on their own blockchain — for example, Bitcoin, Ethereum, or Litecoin.
Tokens run on an existing blockchain — such as ERC-20 tokens on Ethereum or BEP-20 tokens on BNB Chain.
Most new cryptocurrencies you see today are actually tokens, not full blockchain coins.
How Bitcoin Creates New Coins (Mining)
Bitcoin uses a process called Proof-of-Work (PoW).
Here’s how new Bitcoin is created:
- Miners use computers to solve cryptographic puzzles.
- The first miner to solve a puzzle adds a new block to the Bitcoin blockchain.
- As a reward, that miner receives newly created Bitcoin (block reward) plus transaction fees.
This method makes Bitcoin secure, decentralized, and scarce, which is why there will only ever be 21 million BTC.
How Ethereum Creates New Coins and Tokens
Ethereum allows two forms of asset creation:
1. Creating ETH (Staking)
Ethereum now uses Proof-of-Stake (PoS) instead of mining.
Validators lock up ETH, and in return, earn newly minted ETH for verifying transactions.
2. Creating Tokens (Smart Contracts)
This is what makes Ethereum extremely popular.
Anyone with coding knowledge can:
- Write a smart contract
- Define token rules (name, supply, decimals)
- Deploy it on Ethereum
Once deployed, the token instantly exists on the network.
This is how assets like USDT, Chainlink, and Shiba Inu were created.
Steps to Create a New Cryptocurrency
If you want to create a coin (harder):
- Build a blockchain
- Choose a consensus method (PoW/PoS)
- Launch nodes
- Create your native coin
- Publish open-source code
If you want to create a token (easier):
- Choose a blockchain (Ethereum, BNB Chain, Polygon)
- Write a smart contract
- Deploy it
- Verify it on a block explorer
- Add liquidity or utility
Creating a token can take hours, while building a blockchain can take months or years. learn more about cryptocurrencies
