Ever since the bitcoin made its emergence in 2009, the term cryptocurrency has gone viral and popularly used as medium of transaction. Now, we have other types of cryptocurrencies such as Litecoin, Ethereum or Ripple as options besides bitcoin if one cannot afford its market value price. The digital currency is getting exchanged widely and the entrepreneurs find it relatively easier to deal in cryptocurrency in place of traditional currencies such as Dollar, Pound or Euro.
And as we are contemplating the wider picture of the cryptocurrency, talking about the future scenario, it has a much bright scope. The Cryptocurrency exchanges are also known as the Digital Currency Exchanges (DCE) can be conducted between any two parties where the money is transferred electronically using the cryptographic method to secure the payments.
Therefore, if you have the added advantage of a crypto exchange app, then your job will become much simpler as compared to mining the electronic digital currency. According to latest study, the share of bitcoin in the business arena is about 55%.
Where Does Exchange Take Place
The ones who develop the digital currencies remain free from the Digital Currency Exchanges (DCE) that is involved in trading the cryptocurrency. The Digital Currency Providers (DCP) is business entities that basically maintain the customer’s account but cannot issue the cryptocurrency to users directly.
In fact, the user needs to buy or sell the cryptocurrency from DCEs. The DCEs can either be a subordinate to DCPs or it can be independent business firms. In addition, you also have the facility of Direct Trade Platforms, which can spontaneously deal between the two involved parties.
However, here you won’t get the market price as traders set their own prices. The user can also use blockage sites to buy the digital currencies at the price set by agent.
Creating your Own Cryptocurrency Exchange
So, when you have already made a firm decision that you want to develop a cryptocurrency exchange, the first thing you need is obtaining a trade license and most importantly to register your exchange according to the rules and norms of your region.
Initially, most of the governments were like in India were rigid on cryptocurrency transaction, but it has shown some leniency in this regard. However, it is essential that you need to comply with the KYC norms and should be ready with all necessary documents and customer integration with verification API is needed in exchange with its backup.
You would also require charts that informs about the volatility index regarding the digital currencies. They help in comparison of trading pairs. You need to prepare orders; a table of transactions and lastly get a detailed history of most profitable transactions useful to determine the bidders.
Read also: Do you want to Create Your Own Cryptocurrency? Let’s Crack the Code
Creating a User Account System
So, your first job in hand is to develop a user account system as you need to get a cryptocurrency wallet where all these electronic money will be stored. The user has to be provided with the option; whether he is sending or receiving the money.
Since you are creating an exchange, you also have to control the transaction according to the position of the market. If it is modular creation, they even the minute details have to be considered.
The facility of payment processing is an essential aspect that needs to be kept in mind. You require the support of an efficient payment processor such as a bank and payment gateway API so that customers can send or withdraw money without any hassle.
The Role of Aggregator
You need to play the role of an aggregator means to aggregate or assemble particular information from different online sources. It helps users to develop their own coins and put it on the list of assets. It process is costly as the aggregator draws huge amount of information per second and processes it.
Importance of Trading Kernel
If you want to run your cryptocurrency exchange seamlessly, then you also need the support and assistance of a trading kernel that helps in creating order books to carry out the transactions and check the balance amount. This is an important tool in the process and you cannot move further without a trading kernel.
Another significant area where you have to focus is offering a user-friendly UI design so as to get more customers. It is important that the UI design must easily support all devices namely smartphones, tablets, laptops etc. You can ask the developers to develop a customized cryptocurrency exchange application.
Support of Cryptocurrency
So, when you are creating a cryptocurrency exchange, it becomes pivotal to determine how many cryptocurrency your exchange will support. As per the report, there are about more than 1500 cryptocurrencies and their numbers are increasing.
It is obvious that if your exchange offers support to several types of digital currencies, then your investments will grow. Moreover, the competition is also rising; so accordingly take the decision.
Developing the Cryptocurrency Wallet
One of the crucial tasks that need to be done is creating the cryptocurrency wallet. The digital coins will get stored in these wallets. It needs to have an enhanced security system which can improve the trust factor of the customers. The wallets are categorized into two: hot and cold.
Read also: How to Build a Bitcoin Wallet App and How it’s Useful to Mobile Payments
The admin control manages the entire operation of the cryptocurrency exchange. However, its features can be customized according to the needs of the business. You can change the trading charges and maintain the list of cryptocurrencies and adding the new ones etc.
The Software for the Exchange
When you are trying to avail the software for your new cryptocurrency exchange, you have three options on the trot:
The First is Developing Your Own Software
Well, to start off, this is one of the most hectic tasks because you need a special team panel to deal with the project. The project will rendered successfully if each of the members in the team expertise in the area of understanding the software and well familiar with its functioning process.
It is important that they should interpret each of the components appropriately. Another fact that needs to consider is the time and budget required to develop an app. According to an estimate, the time taken would be around 6 months to one year or even more depending on the project.
The Free or Open Source Model
In the second option, you have to clearly make out what are the supporting tools that you have for creating the exchange. Here, basically the role of the developers is to better the codes for which they have first search the bugs wherever possible and then rectify or modify the errors.
The Support of Proprietary Software
Well, to be frank, the third option i.e. availing the support of special readymade software is possibly the easiest amongst the three. It is because you can develop and customize the software according to your needs.
Here the testing is done beforehand and one of the other benefits is evading the need of continuous maintenance. You have to only do a few settings as per the project demands. It also saves lot of time and money.
The Essential Features of Cryptocurrency Exchange
When you are out to create a digital currency exchange, don’t forget to implement these vital features into your exchange app. These include quick and hassle free user registration, sending and receiving of cryptocurrencies at rapid pace, an access to trading accounts, viewing the history of past transactions, round the clock support for customer, change in balances and monitoring the statistics etc.
Team Required Developing a Cryptocurrency Exchange
If you talk about the structure of the efficient team that would be working on the project to develop a cryptocurrency exchange, it would comprise of a backend developer, one android and iOS developer each, one front-end developer, one graphic or UI designer, two quality assurance engineer and a project manager who manages the entire project.
The cryptocurrency is the current demand of the market and is being discussed as a hot topic amongst the business community. You can provide a digital currency exchange to large number of users worldwide, who can carry out their day to day transactions smoothly.
You can say that creating a cryptocurrency is bit costly in comparison to other apps, but it is sure that it a very good and positive investment for the future. You will certainly reap huge profits through the transaction fees.