Here's an inclusive guide to help you adopt the right development strategy for developing and launching your cryptocurrency exchange business effortlessly
It's highly likely that if you have decided to read this blog, you know what's is a cryptocurrency exchange. Now, you may want to start your cryptocurrency exchange but don't know where to start. Then, this guide may help you out and give a clear understanding of a few vital factors that can't be missed during cryptocurrency exchange software development.
This article will clarify the things you need to take into consideration before launching/developing your cryptocurrency exchange. You will get to know how the internal architecture of an exchange platform software should be structured and most importantly, where to head to get the right exchange software.
When starting a crypto exchange software business, the following are the basic steps you need to consider. Let's deep dive into each step of Cryptocurrency Exchange Software Development
Whether you're thinking of operating globally or want to focus regionally, you will need to get certain licensing and approvals to run a crypto exchange. Laws may vary depending on the place. Thus, consult with a legal expert regarding the approvals and compliance with local rules and regulations.
Cryptocurrency word has become so big that almost all governments require crypto exchange business owners to be compliant with KYC (Know your customer) norms.
It is required to eliminate the chances of money laundering.
So, make sure you stick to the region's KYC norms and execute a good customer verification procedure on your exchange.
Also Read: Does GDPR Bring Cryptocurrency Services To A Halt
You may also need to partner with a bank or payment processing provider to enable payments via fiat currency.
Choose a bank that offers a host of online facilities is a good choice.
It's relevant when operating in a developing or under-developed country where the majority of banks do not provide the facility to process an instant bank transaction online.
Processing transactions in such countries may take several days for settlement.
Hence, partnering with a bank providing fast clearance and settlement time of funds will be convenient for your customers.
Any cryptocurrency exchange requires liquidity to operate smoothly.
It's because customers feel skeptical to place orders or deposit funds when they don't see a complete order book and trading activity.
Here are three ways to kick-start your liquidity::
Any exchange must have top-notch security in place for ensuring the security of both the exchange operators and traders.
Also, it should be applied to your customers' private data which involves their KYC information and bank information. Indeed, security concerns should be at the priority.
Eventually, customer support is a must if you want your exchange business to be successful. The staff will handle the KYC request, answer users' complaints, and process the deposit and withdrawal of fiat currency.
A cryptocurrency exchange software development would be incomplete without these four different components working together::
1) First is the trade engine. It should be at the core of any exchange. Its work is to access the order book, matching buy/sell orders, executing transactions and calculating balances. So, begin with ensuring that you have a working trading engine in place before anything else.
2) The second most important thing is the UI (user interface) or the outlook of your exchange website. The UI is something how your users will see your exchange. The UI of the website needs to be user-friendly and intuitive. It needs to be mobile-friendly as most of your users will be accessing your website through their smartphones.
A dedicated mobile app for users would make the exchange more efficient and may also enhance the trading engagements. In a nutshell, the UI of the website should enable your users to;
3) The third is the cryptocurrency wallet. A crypto wallet acts as a daemon to store cryptocurrencies on the exchange server.
It requires maximum security as all the cryptocurrencies are stored in it.
For any exchange to be safe from hacks must have hot/cold wallet system to diversify risk.
The hot wallet is the crypto gateway of the exchange platform. It enables the users to withdraw their digital coins and send them to the external wallets without requiring the approval of the exchange owner.
A cold wallet is where you can store the rest of your coins. It's completely offline and let nobody access your leftover coins even in case of any hacks. Thus, it's advised that always keep a certain amount of coins and lock away them in your cold wallet.
Know more about cryptocurrency wallets
4) The fourth and most important component is to have an admin panel. It's equivalent to business intelligence and management software.
The functions an admin panel must have are;
In conclusion, these four components should be at the core of any cryptocurrency exchange software.
In general, there are three options for cryptocurrency exchange software development which you can opt for. However, the best one is the following.
Employing an in-house team of crypto developers could prove to fund draining as there will be a permanent team. Even if the website is not tasting success, you will need to pay them. So, to avoid this unfortunate situation, hire an offshore cryptocurrency exchange software development team. Then, you'll not need to ponder over other things and concentrate on making your exchange more efficient and worldwide.
So, you can save yourself from finding answers to all these different factors.
It was our beginner's guide to starting your cryptocurrency exchange business.
We hope, you've got the answers to some questions that would be amounting when you first thought about it.
Even if you have any questions, queries, counter-intuitive or suggestions, directly connect with us.
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