Develop Your Own Ethereum Cryptocurrency: A Guide to Creating an ERC-20 Token and Crowd Sale Website
Iām going to teach you today how to create and sell your own coin using the Ethereum network!
I will walk you through the process of using Ethereum smart contracts to construct your own ERC-20 token and crowd sale, as well as how to test them, deploy them to the Ethereum blockchain, and develop an ICO website that is accessible online. In addition, Iāll go over what an Ethereum token is, what an ERC-20 token is, and how an initial coin offering (ICO) operates.
In the eight-hour tutorial video up top, you can see me create the ERC-20 token and crowd sale. I will also walk you through each stage of this tutorialās instructions step-by-step. Iāll respond to a few queries first before we begin toĀ create ERC20 tokenĀ coin and crowd sale.
Using Ether, the native cryptocurrency of the Ethereum blockchain, you can establish your own cryptocurrency, or token, on the Ethereum network. To put it simply, ERC-20 is a standard that outlines these tokensā behavior to make them work with other platforms, such as cryptocurrency exchanges.
Along with reading this article, you can also watch the video below for additional details on how ERC-20 tokens operate.
How does that operate? Letās take a preliminary look at the operation of the Ethereum blockchain.
Similar to Bitcoin, Ethereum is a blockchain. Similar to Bitcoin, Ethereum maintains track of account balances for users holding its native money, Ether. Ethereum is a platform that, in contrast to Bitcoin, enables you to design your own token without starting a fresh blockchain.
A smart contract can be used to produce an Ethereum token. The ERC-20 standard outlines the functionality of this coin smart contract.
To further understand how an ERC-20 token smart contract functions, letās look at an example. Assume for the moment that we wish to issue a token with the name āMy Tokenā and the symbol āMTK,ā with a total supply of 100,000,000.
Initially, a few fundamental token properties are tracked by the token smart contract. It keeps track of things like the name āMy Token,ā the symbol you see on a cryptocurrency market, and the overall number of tokens in circulation.
Additionally, it records who and how much of āMy Tokenā is owned.
Like any other cryptocurrency, ERC-20 tokens can be moved from one account to another for payment.
They can also be bought through an ICO, or initial coin offering, which is what weāll look at in the following section.
They can also be purchased and sold on exchanges for cryptocurrencies.
How a Crowd Sale (ICO) Works
There are numerous methods for distributing ERC-20 tokens. Having an initial coin offering (ICO) or crowd sale is one well-liked technique. Through the creation of their own ERC-20 token, which investors can buy with Ether, a company can raise capital through crowd sales.
In addition to reading this article, you can watch the video below for additional details on how crowd sales operate.
Every time a crowd sale occurs, the company receives liquid capital in the form of Ether that investors have paid for, along with the ability to retain a portion of theĀ ERC20 token developmentĀ that were sold during the crowd sale.
An investor needs to have an account and connect to the Ethereum Blockchain in order to take part in a crowd sale. The ERC-20 tokens that are acquired during the crowd sale can be stored in this accountās wallet address in addition to Ether.
The investor has to go to a website for a crowd sale that communicates with a smart contract. The crowd saleās operational guidelines are all governed by the smart contract.
When an investor buys tokens through the website for the crowd sale, they send Ether to the smart contract, which then instantly dispenses the tokens to their wallet.
The smart contract controls the crowd saleās behavior and determines the tokenās price.
There are many different forms and sizes that crowd sales can take. They may consist of several stages or tiers, such as the Pre-ICO, ICO, and ICO Bonus phases. These tiers can all occur at various times and exhibit various behaviors.
To limit which investors can buy tokens, they can also have white lists.
Additionally, they may hold back a certain number of tokens that are not sold during the crowd sale. Typically, these reserves are kept aside for particular company members, such as advisors and founders. These reserves may take the form of a percentage or a set quantity of tokens.
After a crowd sale concludes, an administrator may decide to close it. All of the reserved tokens will be given to the relevant parties whenever this occurs.
ERC-20 tokens are created using Ethereum smart contracts, as I previously explained. Presently, what is a smart contract?
Ethereum gives programmers the ability to create blockchain-based apps with smart contracts, which contain all of the applicationsā business logic. They allow us to run code and read and write data to the blockchain. Solidity, a programming language that resembles Javascript, is used to write smart contacts. It is a full-featured programming language that will enable us to accomplish many of the same tasks as Javascript; however, as we will see in this tutorial, its use case has caused it to behave somewhat differently.
For an ERC-20 token, the smart contract maintains track of token ownership and account balances in addition to controlling all other aspects of the tokenās operation.
An API specification called ERC-20 specifies how Ethereum tokens must be constructed. Tokens can be supported in numerous use cases thanks to this widely accepted standard. In order for our token to gain widespread acceptance, we aim to create one that complies with this standard. Without such a standard, we might be able to create tokens in countless ways that might not be compatible with one another!
A token that complies with the ERC-20 standard can be used for the following use cases, among others:
Transferring tokens between accounts via a wallet
Purchasing and selling on exchanges for cryptocurrencies
Purchasing tokens through an initial coin offering (ICO), as this tutorial will show you how to do
The interface to which the smart contract must react is essentially set forth in the ERC-20 specification. It outlines the functions that the smart contract must have as well as its structure. Additionally, it offers a few suggested features that are essentially optional but still nice to have. It specifies the kinds of events, like transfers, that our token must have. As you can see, consumers can subscribe to events that smart contracts emit, and we can do the same with this standard.
This is an illustration of how the ERC-20 standardās transfer function is implemented. It controls how an ERC-20 token can be sent from one wallet to another and is required by the smart contract.
The ERC-20 standard is implemented in the following ways by this function:
It acknowledges the right arguments.
In the event that the user has insufficient balance ā that is, not enough tokens to transfer ā it fails.
The senderās account balance is transferred to the recipientās account.
It starts an event in sales.
It gives back the accurate value, such as true.
If none of this makes perfect sense right now, donāt worry. When we construct the ERC-20 token in the step-by-step video tutorial, Iāll go over each of these components in detail.
The Ethereum Improvement Proposal github repository has more information about theĀ ERC20 token development serviceĀ standard. This is the forum for all community discussions regarding Ethereum standards. As you can see, you can follow the evolution of Ethereum technology in real time by bookmarking that repository and going through the submissions!
