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The use of cryptocurrencies has become widespread in recent years due to their feature-rich characteristics. The buying, selling and trading of cryptocurrencies take place on a crypto exchange platform. Due to that, cryptocurrency exchange platform development has gained huge traction in recent years and is sure to experience significant growth and adoption in the coming years.
Crypto Exchange Platform
A cryptocurrency exchange is a platform that enables users to exchange one cryptocurrency for another cryptocurrency or fiat currency. Now, depending on the type of exchange, it is either like a stock exchange or a currency exchange (i.e. at the bank or airport).
Also, Read | Crypto Exchange Software Development | A Complete Step-by-Step Guide
Crypto-to-Crypto Exchange Platform
These exchanges enable users to buy one cryptocurrency using another one. It means, they need to buy a cryptocurrency on a fiat-crypto exchange first and then send it over to the wallet of a crypto-to-crypto exchange. These exchanges are generally used by experienced traders.
Peer-to-Peer Crypto Exchange Platform
Peer-to-peer exchanges match a buyer with a seller directly without involving any intermediary or third-party. The most famous example is Localbitcoins, which will match a buyer with a number of available sellers. It gives the buyer an option to choose the best price of the selection.
Fiat-to-Crypto Exchange Platform
These are the kinds of exchanges that enable users to buy a cryptocurrency directly using fiat currency. These are most popular with those who aren’t familiar with the crypto market.
Brokers
The broker's exchange is one that enables users to purchase crypto. In other terms, with a broker exchange, users can swap their fiat currency for cryptocurrency or cash out their cryptocurrency for fiat. It is the safest and easiest cryptocurrency exchange for beginners.
Essentials for the Development of a Cryptocurrency Exchange Platform
Essentially, the following are the aspects to consider for the development of a cryptocurrency exchange platform:
Also, Read | An Investor’s Guide to Cryptocurrency Exchange Platform Development in 2020
Security and Authenticity
It is imperative to implement robust security mechanisms to ensure the security of a crypto exchange platform. There are a few necessary security mechanisms that an exchange platform must have to ensure the security of its operations as well as users.
Due to the digital nature of a cryptocurrency exchange, it is always vulnerable to security risks. From exchange hacks to email scams, there’s a lot to be looked into. Here are the essential security features that a cryptocurrency exchange should have:
Web Protocol Security
Many web protocols are vulnerable to cyber attacks due to a lack of security headers. Following security headers can be implemented to prevent cyber attacks and make the exchange platform more secure.
- X-XXX-Protection: Prevents the cross-site scripting attacks
- X-Frame-Options: Prevents the contents to be embedded into other websites, safeguarding against clickjacking attacks.
- HTTP Strict Transport Security (HSTS): It helps to ensure that all the browsing sessions have HTTPS Protocols.
- Content Security Policy (CSP): It helps to prevent the risk of XSS attacks by enabling the header to determine which dynamic resources are permitted to load.
Method of Purchase
A crypto exchange platform should support a variety of methods of purchasing cryptocurrencies i.e. deposits by bank transfer, Paypal, credit or debit cards, or cryptocurrency. The integration of various purchase methods with the platform enables a wider audience to join and trade cryptocurrencies.
Generally, an exchange platform doesn’t provide users with multiple methods on the platform for trading. This becomes tedious for new users. So, it’s best for a cryptocurrency exchange platform to:
- Provide Purchasing of one cryptocurrency through another cryptocurrency
- Provide purchasing of one cryptocurrency through other fiat currency.
A crypto exchange platform must provide users with various methods to purchase cryptocurrencies on the platform for trading. New users who don't have cryptocurrencies to buy cryptocurrencies must get the provision to buy using fiat money.
Then, they can easily enter the crypto market. Otherwise, if the crypto exchange platform provides only one method i.e. crypto to crypto buying then a new user will need to go to another exchange platform that provides fiat to crypto purchase, and then he will need to come back to your crypto platform to start trading.
Supported tokens
It is essential to develop an exchange platform that supports various cryptocurrency tokens for users to purchase.
There are more than sixteen hundred cryptocurrencies in circulation today, with a combined market cap of over two eighty-nine billion dollars, according to data. Investors globally are eager to trade in this rapidly growing space.
The benefit of having a single cryptocurrency exchange platform that supports multiple cryptocurrencies is that it's hassle-free. It removes the hassle to track and manage the digital assets across multiple cryptocurrency exchange platforms for users.
User Interface and User experience
An intuitive interface and good user experience aid user actions to be more informed and efficient. An exchange platform development with intuitive and user-friendly UI/UX usually experiences significant growth in transaction volumes and user adoption.
Crypto proponents believe that cryptocurrency exchange platforms like Binance or Coinbase will achieve universal acceptance someday. But, a lack of usability or UI/UX hinders the path to its mainstream adoption.
Also, Read | Cryptocurrency Exchange Platform: Architecture, Security, and Features
Conclusion
There is a growing number of users across the globe who are examining blockchain and cryptocurrencies. It includes stablecoins, as well as self - regulated and global regulatory standards. It indicates that there will be more widespread public adoption. In the current year only, we will see different experiments tried by many governments around the globe for adoption. Some of them will work while a few are not going to work. But, they will have a tremendously positive effect on crypto adoption.
