Since its creation in the year 2008, Blockchain technology has been making waves all over the Internet and disrupting traditional ecosystems. Many companies all across the world have already incorporated blockchain into their business with the help of Companies like Applicature, who are experts in Blockchain development.
In the cryptocurrency industry, blockchain has created a boom that has seen the market value increase to a staggering $400 billion globally. Many financial institutions have accepted and integrated crypto marketing services welcoming this decentralized open-source monetary system. This thriving and lucrative free-enterprise economy necessitates the need for a cryptocurrency exchange platform.
In this article, we will be sharing in simple details how you can begin your crypto exchange or trading platform with our developers at Applicature and creating a lucrative cryptocurrency marketing agency of your own with an effortless exchange business easily!
How does Trading Cryptocurrency work?
Before going into the technical details of starting a crypto exchange platform as a crypto marketing agency, let’s talk about how cryptocurrency exchanges work. Bitcoin or any other cryptocurrency is represented by a string of code that is non-changing in nature and carries a value known as a “token”.
Each set of code makes up a “block” of information, and a transaction takes place when funds are transferred and they are recorded in a public ledger known as the Blockchain. The Blockchain contains blocks of information linked in a chainlike manner and each new transaction represented by a new block of code is added to this chain.
This blockchain ledger is updated across each of the participating nodes and these nodes retain a similar copy of the whole chain on every node. This makes it transparent and impossible to be manipulated or modified by a single entity. It is highly secure due to its security architecture and it is safer than the traditional banking system for peer-to-peer transactions.
Cryptocurrency Exchange
Through a crypto exchange platform, there are many ways users can get specific cryptocurrencies. The platform allows users to create a unique cryptocurrency wallet and accept cryptocurrencies from others in exchange for services or products. A crypto exchange business, make it possible for users to purchase cryptocurrencies by buying them directly using regular fiat money.
How does this work?
The cryptocurrency exchange platform serves as an open market that allows buying, selling, or trading of cryptocurrency tokens and fiat money by users. Hence, a cryptocurrency exchange platform is software that allows various users to collaborate and trade using fiat currencies and cryptocurrency tokens with blockchain technology.
The terms cryptocurrency market and cryptocurrency exchange are closely related with little difference. The cryptocurrency market allows users to PURCHASE cryptocurrency tokens using FIAT currencies while a crypto exchange enables users to TRADE services, products, and digital goods in exchange for fiat currencies or cryptocurrency tokens. It is similar to the stock exchange where users make currency exchange and trading activity.
Types of Exchanges
There are two notable types of cryptocurrency exchange software a crypto trading agency can build.
They are:
- Traditional exchange
- Peer-to-peer exchange
The traditional exchange
This exchange allows owners to set a predetermined set of rules and users that visit the webpage can post listings or offers that comply with the pre-set terms and conditions. Buyers who are interested will be able to secure a deal without having to deal directly with the sellers because each of the transactions takes place via an order book that serves as the intermediary on the platform.
Peer-to-Peer exchange
The P2P exchange allows merchants and sellers to create listings, contracts and offers based on their personal terms and conditions. The merchant or traders and the buyer can also communicate with themselves by using a direct message option on the crypto exchange platform. Every transaction takes place directly between the merchant/seller and the buyer and the goods are stored in a “vault” in the form of a smart contract until both of them fulfill their part of the deal.
The type of cryptocurrency exchange to use often depends on your preferences and it is best to consult with our specialists, experts, and developers on what platform will suit your business before making the final decision.
At applicature, we have already implemented successful cryptocurrency exchange platforms across different platforms. Our software development teams can help you build different kinds of exchanges which will generate income through many means. We will help you select the best options for getting your income and this includes:
- Signup fees
- Charging transaction/trading fees
- Paid membership subscriptions
- Specialized profile fees
- Paid commissions to agents to reduce advertising costs
As a Business what do you need to consider before beginning a Crypto Business?
We have listed some factors every business should consider before creating Bitcoin exchange software for your company.
Do a Market Survey
It is vital to conduct a detailed analysis of your competitors. This process will help you understand your target market and determine the improved features and capabilities to incorporate into your crypto trading website. By using a survey, you get to know your customer, discover opportunities for innovation by identifying the challenges your competitors’ platform has that you can solve in your new cryptocurrency exchange.
Identify your Unique Selling Point
Our team will help you determine your business’s Unique Selling Point that will help you gain a significant number of users in a specific market segment thereby creating a challenge for your competitors. This can be achieved by advancing existing features in the market or developing entirely new functionalities based on the needs of the target users.
Local or Global?
Deciding on a market niche is also vital before beginning the development process. Targeting a specific market allows you to create an advertising campaign that focuses on a specific population’s demographics. Our team will work with your business on an individual basis to help you develop a winning strategy that will help you attract local or global customers in your market.
Regional Limitations
You will need to have detailed information about the regulations and policies in the regions or areas where you want to operate. We will review the existing legislature and help you create the best services within the framework. Areas to focus on includes:
- Registering your company
- Trade laws
- Financial and Taxation laws
- Technological regulations relating to Cryptocurrency trading
Setting restrictions
We can work with you to help your company to determine set parameters to manage financial transactions like Transaction and User Limits on your crypto exchange website. This will help you to scale up your business systematically and communicate properly during the development process. You want to have the capacity to manage the growth, activity and meet the needs of users on your platform every step of the way.
Terms and Conditions
Working with our legal team, we provide your company with the needed expertise to set and review the terms and conditions under which your cryptocurrency exchange will operate in line with local laws and international standards. This entails designing a comprehensive business strategy that will clearly state the way your company operates, make profits, manage finances, documentation, and every other legal and commercial aspect of your business. This is how we simplify your work at Applicature.
How to build Cryptocurrency Exchange from a technical perspective?
Building a Cryptocurrency Exchange platform is similar to undertaking a software development project. Have a clear idea of the features and capabilities you would like to feature in your new exchange. Let’s examine some development steps.
1.Set a Timeline
The first step is to plan a realistic schedule for your project. This will enable you to organize the process of financing the development, create a working plan of deliverables, and set the mode of communication with your company.
2.Supported API’s and Integration
Ensure the development team chooses the best APIs to integrate with your new exchange platform. This will involve a total review of all the features you wish to implement and the interconnected APIs needed for providing each component.
3. Online or Device Based Apps
Next, you need to choose between developing a web-only application, mobile apps for Android and iOS, or both.
4. Front-end & Back-end Frameworks
Using the right frameworks and technology stack for your design is the most crucial aspect of the software development phase of your new exchange platform’s back and front end.
In front-end development, applicature utilize the best, modern, and asynchronous open-source frameworks. we use the most interactive java libraries such as Node.js, React.js, or Ractive, to give our clients a fast and beautiful user interface for their platform’s UI.
During the development of the backend, our developers use a variety of stable frameworks such as Perl, RubyonRails, Python, Laravel, or Apache, and other suitable databases.
5. Preparing with Reliable Servers
When choosing a framework for the backend, it is important to have an actionable strategy that will allow you to scale and expand in the future. Using a flexible framework gives room for future expansion because the technology is reliable, stable, and scalable as your business grows.
Let’s take a look at some of the challenges that may arise
If you have followed our guidance so far carefully, you would have been able to prevent most of the issues that may arise during the business or development process of building your Crypto exchange platform. Some of the challenges to watch out for includes:
Security
To overcome this challenge, we recommend:
- The use of biometric data of users for authentication
- The use of artificial intelligence in detecting unusual activity during transactions
- Using a Blockchain for your exchange platform
Speed
Bitcoin has a speed of 7 transactions per second while ether has 20 transactions per second. A queue is formed if there is an increase in the number of transactions and an increase in the transaction fees. You can prevent this by:
- Regulating the size of a block according to the exchange load (Scalability)
- Use a PoS protocol
- Use a centralized blockchain instead of a decentralized one.
Local Laws
Many people are concerned about which countries their exchange platforms can function in. You can review the section on Regional limitations above.
Here are some of the successful Crypto exchanges
1. Coinbase
A leading cryptocurrency exchange platform
Pros:
- Simple to use
- Best for beginner investors
- Accepts fiat currencies
- Secure and highly-regulated
Cons:
- Not available in all countries
- Highest fees among the cryptocurrency exchange platforms
- Strict legal framework, shares data with tax agencies.
2. Binance
Pros:
- Accepts More than 120 different cryptocurrencies
- Very Secure
- Small withdrawal charges
- popular with many users
- Allows purchase and trade between different cryptocurrencies
- Small withdrawal fees
Cons:
- The platform may be difficult to use without prior experience
3. Coinmama
Pros:
- Stable security
- Allows SEPA banks transfers, credit/debit cards, ApplePay, etc
- User-friendly and easy to use by beginners
- Easy payment
- Valuable customer support
Cons:
- High processing fees
- Little variety of cryptocurrencies to choose from.
4. Kraken
Pros:
- Reliable exchange
- Accepts multiple fiat currencies
- Comparably low trading charges
- Supports a large number of users
- Helpful features for beginners and more advanced users
Cons:
- Poor customer support
- Few coin options to pick from.
5. eToro
Pros:
- Copy-trading service
- Solid reputation
- Allows many cryptocurrencies to pick from
Cons:
- Relatively high fees
- Low customer support
Conclusion
There you have it. In this article, we have shared important tips on how to start a cryptocurrency exchange from the scratch. We hope that our tips will inspire you to launch your crypto exchange website with excellent features for traders. Our consultancy services will give you a truly efficient business plan that will ensure you succeed.
If you want some more help from the professionals, our experienced and friendly team is always ready to grant your wishes. You can also find out more about our exciting software or crypto solutions and how to get started at Applicature.
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