The leading stats provider in Crypto Platforms, CryptoCompare has said that there is a great increase in the number of people who have started using trading platforms in the month of April. The reason why users are attracted to crypto exchange platforms is that:
- Initially, apart from bitcoin, there are more than 1300 altcoins and hence there is a great demand for exchange services.
- While the second reason is, most of the countries have made them legal and thus people are interested to make use of digital assets.
Moreover, there are 1600 cryptocurrencies in total and these platforms usually earn a decent percentage on transactions performed by users. Therefore, developing your own crypto trading platform can be a profitable one.
Pre-requisites before creating Crypto Exchange Website:
Check for Regulations
Initially know whether you are going to operate globally or for a specific location. Once you decide on that, you should seek the legal advisories to know about jurisprudence.
Check you have enough funds
Building a Crypto Exchanges loaded with security features is mandatory. Ensure you have a decent amount of money to build your trading website. Else you can raise the required funds through a strategy like Initial Coin Offering!
Build a Community
It is crucial that you build a huge set of audience who should support your products and services. There are diverse platforms available to build your user base. Either through Social Media sites such as Facebook, Instagram, Linkedin, etc or through other marketing strategies such as Email Campaigns, Blogging, etc.
What type of Exchange Platform do you require?
There are two types of trading platforms in the market. Centralized and Decentralized Exchanges. If you are looking for centralized exchanges, you can create a trading platform similar to Coinbase, Bittrex. In these cases, exchanges have control over the user funds. Added, they also ensure high liquidity. Whereas in exchanges such as Idex, EtherDelta traders have the complete control of their exchange. Decide which type of exchange you actually need.
Choose who is going to develop
Decide whether you are going to develop on your own or you need a solution provider. If you are a tech-savvy person and skilled coder, then developing a trading website is going to be an easy task for you. You have plenty of online resources and tutorials which can help you. However, the duration period can be longer when compared to the latter.If in the case you are going to hire a development team, you should consider a few factors before hiring.
- Know the Expertise of the team.
- Know the type of products they have previously delivered.
- Know the features they provide.
Choosing the type of solution you require
Decide on which type of solution you actually require. There are primarily, three types of solutions:
1. White-Label Solutions
White-Label Solutions are the concept in which companies can rebrand the product created by other enterprises and make everyone believe that they have created.
There are plenty of companies who provide White-Label Solutions. By using this scheme, you can get your product instantly as they are already developed.
2. Open-Source Solutions
As the name suggests, this type of solutions are readily available and can be used by anyone. The greatest advantage is, you don’t need to pay for Open-Source Solutions. Anyhow, security is a bit weaker and databases are vulnerable.
3. Custom-Software Development
This type of development is done from scratch. This can take a long time but can ensure you with high-profits. You can list out the features you need in your Crypto Exchange website and your development team can provide you with solutions.
Building Cryptocurrency Exchange Website from scratch
If in case you are developing a trading website, here are things you should follow:
Collaborate with Established Banks
Exchange platforms will use of fiat currencies. Therefore, you should partner with reputed banks or payment processors. While choosing the banks or payment processors, make sure they are in compliance with the country you have chosen.
Building the Components of Crypto Exchange
Ensure you develop a high-end architecture which encompasses the following components:
1. Trade Engine
When you start with creating your Cryptocurrency Exchange Website, the trade engine is the important factor.
Trade Engine handles all the transactions and checks for the balances. Added, it is responsible for matching the buy/sell transactions on the exchange.
2. User Interface
An Intuitive and attractive user interface will bring a lot of potential users to trade on your platform. In the front-end UI, user can log in, check for the transactions, can deposit or withdraw the funds, etc.
In the back-end, users have the options to alter the details entered. It can be such as changing the trading fee, adding new cryptos, managing the transaction history, etc.
3. Cryptocurrency Wallets
A Crypto Wallet is the one which stores the cryptocurrencies and private keys. There are a lot of cryptocurrency wallets available like Desktop Wallets, Mobile Wallets, Hot Wallets, etc. Since your wallets hold private keys, it is important that you create secured wallets.
Implementing Security Measures
Since Crypto Exchanges have sensitive information, it is mandatory that you should make a trading platform which isn’t prone to hacks.
1. Two Factor Authentication
This is the most common mechanism which you should utilize while creating a cryptocurrency exchange website. With this strategy, you should enter two authorization keys to your account.
One is through the regular password and another thing is to enter the code received either through SMS/call. Using this strategy, the website remains more secured.
2. Multi-Signature & Time-Lock
As we discussed earlier, in order to perform the transactions, users should confirm the private keys. For additional security, exchanges can introduce multi-signature confirmation which requires more than a single key to execute transactions.
Time-Lock is similar to Multi Signature but with an additional step. As the name suggests, the multi-keys i.e. private keys should be entered with a time gap in between. That is, you can enter your first private key whenever you want. But the second key should be entered after a certain period of time, say 24 hours. Thus hackers can’t get your money in their pockets!
3. DDoS Attack Protection
This attack means that overwhelming with traffic from multiple sources with the intent of suspending the services. Therefore, it is a must that you implement security measures to get rid of this attack.
Undoubtedly, trading platforms will remain to top the headlines in the upcoming days as well. Make sure the trading platform which you develop support a good number of cryptocurrencies. Added, enhancing the transaction speed can attract a high number of users to your platform.
If you are planning to hire skilled developers to get a completely secure cryptocurrency exchange website, there are plenty of startups ready to help you! If you have a requirement for White-Label Solutions or even custom-software development, experts can assist you with the work done!