Ever since the advent of the first cryptocurrency Bitcoin in the year 2009, cryptocurrencies have been gaining huge traction and popularity among global investors because of their many advantages. Especially after the blockchain technology concept was brought in, it expanded the benefits to the investors in the crypto business. Hence, cryptocurrencies and cryptocurrency exchanges have been the spotlight since then, in the digital business sphere.
Because of this, Every budding entrepreneur is willing to try their hands with the crypto business and aspiring to own their own crypto exchange platform. But with the widespread demand and competition, they are often confused about where to begin and which is the right way to go for developing an exchange software that will survive and shine through the competitors. In this article, we are going to discuss every solution that you will require to build a robust cryptocurrency exchange software for your business. If you are a beginner, let’s start from how a crypto exchange software works.
How does a crypto exchange software function?
A crypto exchange software allows investors to exchange their cryptocurrencies for another, buying and selling of coins and also,exchange of cryptos for fiat money and vice versa. Crypto exchanges also work almost like stock exchanges but the difference is that, in stock exchanges, traders exchange assets such as shares, company stocks etc to profit from the changing rates, whereas in cryptocurrency trading, traders use cryptocurrency pairs to manage and profit from the volatility in the crypto prices.
Crypto exchanges allow investors to buy and sell cryptos with low commission fees. The traders will be charged a minimum transaction fee for conducting trades on the exchange platform.
Let’s take a look at the working of the exchange software step by step,
- A multitude of users around the globe are connected to a secure network through the crypto exchange software
- A trader makes a request for a transaction with the required details
- The multiple nodes linked with the exchange validates and verifies the user’s request
- Once the request is verified, the transaction takes place.
- The exchange records the transactions with the help of blockchain technology.
- With every new transaction, a new block is added to the existing blockchain.
- Once the block is added, it is not possible to erase, or alter the record of the transaction.
- Thus, cryptocurrency exchange allows secure, seamless transactions.
Why should you go with crypto exchange software for your business? What are the key advantages that will make your business profitable? Let’s take a look.
Significant advantages of cryptocurrency exchange
- Enhanced liquidity
Liquidity is the key factor that will help investors with converting their cryptos into cash, without affecting the market price value. It is essential for an exchange because it offers users with quicker, efficient transactions at better prices.
- Flexible trading hours
The crypto market allows 24/7 transactions from anywhere to anywhere around the world as crypto exchanges are not governed by central authorities. Crypto exchanges allow direct transactions between traders with zero downtime.
- User Anonymity and immutability
Blockchain technology allows the users to conduct transactions anonymously and their information is completely protected. Also, transactions once recorded on blockchain, cannot be interchanged/ erased which ensures security to the users.
- Elimination of third parties
As crypto exchanges allow direct peer-to-peer transactions, it removes involvement from any third party, therefore ensures a risk-free transaction process to the users.
- Control and security
Crypto exchange platforms offer sole ownership to the users. The user gets to control their funds and makes decisions on the transactions that happen on the exchange. This offers enhanced safety and security to their funds and helps with a hassle-free business experience.
How to develop a cryptocurrency exchange platform? What is the best approach?
To develop a crypto exchange software, there are two ways to go. The first one is, building the exchange from scratch. To build an exchange from scratch involves several processes such as,
- Choosing a location to run the exchange and acquiring legal compliance based on its geographical restrictions.
- Conducting research on the market needs and gathering equipment based on them to build the exchange
- Partnering with a bank or financial institution
- Implementation of technological and security factors
- Connecting with external exchanges for improving the liquidity of the exchange
- Thorough testing
- Planning out clear-cut marketing strategies
- Preparing exchange for launch.
To be done with all the above mentioned steps will take an ample amount of time and cost a fortune. It also involves quality technical assistance to withstand the competition in the market.
The second method is probably the most convenient method, obtaining whitelabel solutions. Whitelabel crypto exchange platforms are readily-available solutions that come with every necessary technical, security and feature integrations required for the exchange to run. Also, whitelabel solutions come with a name, branding, logo, UX/UI based on the preferences of the customer. They are easy, customizable and scalable. They are readily-available, quick to launch and available at cost-effective prices.
For deeper understanding of whitelabel exchange software, let’s take a look at the significant features that come along with it.
Salient features of a whitelabel crypto exchange software
- Multi currency support integration
- Multi-language support
- Automated KYC/AML
- User-friendly interface
- Secure, multicurrency wallet
- Powerful trade matching engine
- High Volume TPS
- High-volume liquidity
- Spot trading function
- OTC integration
- Order sharing
- Admin panel
- Payment gateway integration
- Integrated referral program
- Mobile applications support
- Enhanced security
With whitelabel solutions,launching crypto exchange becomes way quicker and easier. They are already available for launch and the users have to just buy and install for the exchange to hit the market. They are also pre- tested before delivering to the customers, hence they are 100% reliable.
There are a multitude of companies offering whitelabel cryptocurrency exchange solutions. If you want to choose the right one, conduct extensive research and choose a well experienced team of developers.