Creating a new cryptocurrency is remarkably--or perhaps disturbingly--easy these days. 

Last year, startups raised a total of $3.7 billion by selling their own digital tokens through initial coin offerings, a way to raise money online without giving up equity or dealing with venture capitalists. Instead of having to code their own digital tokens from scratch, businesses can use what's known as the ERC20 standard, a protocol based on the Ethereum network.

"It's almost like creating your own blog with WordPress," says Peter Van Valkenburgh, the director of research at cryptocurrency and blockchain think tank Coin Center

But if even the DIY version is too complicated, several companies have recently sprung up to help the cryptocurrency-illiterate get in on the action, both by creating new currencies and adding blockchain technology to their business. If crypto is the new gold rush, says Van Valkenburgh, these businesses are the ones cashing in by selling picks and shovels.

From Russia, with blockchain

Waves, an open blockchain platform based in Moscow, allows anyone to create and launch a new token in less than a minute with only a few clicks, says Sasha Ivanov, a serial cryptocurrency entrepreneur and the founder of Waves. Clients first download the Waves wallet, a Chrome browser plug-in. After creating an account and buying one Wave token, (currently valued at about $10), they click on the token creation tab, name the coin, add a description, decide the total volume of coins to issue, and set it to launch. The coin immediately becomes available on the Waves exchange, where investors can buy and trade it.

Ivanov launched Waves in 2016 and raised $16 million during its ICO. Since launch, dozens of businesses have used Waves to launch their own currency, including GameCredits, which wants its token MobileGo to become a global video game currency, and Burger King franchises in Russia, which created Whoppercoin for a loyalty program.

Waves also helps companies find novel uses for blockchain, the distributed ledger technology that underlies cryptocurrency platforms. For example, Dutch startup LegalThings used the Waves platform to launch LegalFling, a controversial sex contract application. 

Everyone wants in

Harrison Hines, the founder of Brooklyn-based Token Foundry, which helps companies adopt blockchain and token technology, says he declines about 99 percent of his potential clients. "We turn most people away because they don't have a good justification to use blockchain technology and create a digital token," says Hines. "It's clear most people want to take advantage of token mania and make money."

Token Foundry has eight clients, all focused on utility tokens, including one for a decentralized lottery project. Hines founded Token Foundry through blockchain incubator ConsenSys, where among other projects it helped Australian mining conglomerate BHP Billiton improve its supply chain tracking system through a private blockchain. 

As Hines alludes, many companies that want to use blockchain and token technology are just making efforts to cash in on cryptocurrency fever--see tokens like KodakCoin, which many observers have criticized as unnecessary and indicative of a crypto bubble. (Kodak stock shot up 120 percent when it announced its digital token.)

For now, companies continue to turn to tokens--and enterprise clients are just the beginning, says Cameron Chell, the co-founder of ICOX Innovations (formerly known as Appcoin Innovations). "It's our view that in the next five to eight years that people will have their own digital currency," says Chell, whose company is creating KodakCoin. "Just like people now have Facebook accounts."

Everything You Need to Know About Bitcoin in 2 Minutes
Published on: Jan 25, 2018