How to Build a Cryptocurrency Exchange Application and How Much It Would Cost
You are surely aware of the latest cryptocurrency trend. Almost everyone who has an opportunity — is doing “mining” such well known now. And news, that came out of this, the lack of the GPUs on the store shelves. Perhaps, you are also struggling of that you can’t upgrade your PC.
The key takeaway is that cryptocurrency hype reached even non-technical-savvy people. Soon they’ve figured out that Bitcoin, Ethereum, Litecoin are the new option, just like US Dollar and Euro, to perform their regular money operations like sending a money transfer to anyone. More and more people creating their own cryptocurrency wallet, willing to fill it in the future. Moreover, by this very feature cryptocurrency is attractive: scanty transaction cost compared to national currencies. Just perfect for using this in cryptocurrency exchange application.
Thousands of people who doing stock and currency trading for life, now have cryptocurrencies on their radar as a new money making machine. People here and there saying that this trend won’t last long and Bitcoin is about to fail soon and leave all the traders and miners disappointed. Despite that opinions, cryptocurrencies are doing well and still left plenty of space for successful startups and trading operations.
So what is the cryptocurrency? Cryptocurrency — is a type of the digital currency, which emission and registration are based on asymmetric cryptography and using different cryptographic protection methods, such as Proof-of-work, and/or Proof-of-stake. Cryptocurrency system is decentralized and functioning in Peer-to-peer network. Saying simple — its emission is impossible. It cannot be destroyed or counterfeited. But the main disadvantage is its mining difficulty. Basically, building up a farm of GPUs for its mining will barely reach its recoupment.
Here we can make some calculation for the comparison. The smallest “farm” for mining containing 6 GPUs price starts with $5000 approximately. The basic scheme of mining — is a solution of the mathematical equation. Its strategy is if more people are involved in mining, the more cryptocurrency resource is obtained — the more difficult these equations are to solve. So as the Bitcoin is at its vacillating peak with $3000 for each — it will take a long time to find at least one coin, and it will take much more time for the smallest farm recoupment. Moreover, we will remind, that the price of $5000 — is the lowest price for a basic farm. Surfing the internet you can find fanatics, renting warehouses filled with GPUs to the ceiling. Therefore, you can imagine that their price can reach fabulous millions of dollars. In addition, don’t forget as well, that you will need to support the work of the high-performance farm. The electricity cost for its maintenance can be even bigger than its starting price. Later on, the mined bitcoin exchange won’t save the financial stability of that farm owner. And that are just main obstacles of mining aforementioned. Much more petty nuances will repulse your desire for cryptocurrency mining.
The Basic Concept of a Cryptocurrency Exchange Application
As the mining is now low-profitable, the real way to get benefit with cryptocurrency is providing people who are involved in the cryptocurrency activity with the services. Being intermediator is as profitable as being executor or manufacturer. That’s a hard to argue business rule. Latest trends show that mobile cryptocurrency exchange application will be highly demanded considering increasing popularity of the banking operations involving Bitcoin, Ethereum etc., especially with such attractive feature as a miserably low transaction cost. More and more people learning about cryptocurrencies and its relative low transactions fees in comparison with long-livers like the Western Union and Moneygram. It is worth to say that many people are already using cryptocurrencies for money orders across the countries because it is cheaper and faster. Considering that, it is obvious that Bitcoin may become a new standard for that kind of the operations and will be used by the general public. But there is no one central cryptocurrency exchange application, that would hold it’s main advantage in one unit.
As we mentioned before — the most obvious way to get benefit with cryptocurrencies — are trading platforms. Let’s get deeper into the functionality of the cryptocurrency exchange application that can perform such functions as sending money transfers in cryptocurrency and automatically exchange Bitcoins into any national currency.
The Application Description
The preliminary plan of cryptocurrency exchange application overall work looks the next way:
First, the user is registered within the system, creating his own cryptocurrency wallet. That can be wallet as for bitcoins, so as for other currencies.
When the sender wants to send money, first he makes a transaction into the system. Then the money is loaded to his account within the system on the app server. Then user specifies, where he wants to send money and in what currency.
The next steps are made without involving the user.
The cryptocurrency purchase is done automatically by the system on the server side without involving the end user. Then the cryptocurrency is sold and foreign currency is purchased. As the last step, now visible for the user, the currency obtained automatically withdrawn to users bank account.
However, our investigation shows that that is not actually possible to do exchange application process in a completely automatic way. The main reason is that none of the investigated platforms have API to withdraw money to a bank account. Except for ones that allow transferring money to a “confirmed” accounts. So, it depends very much on what is the main direction of the money transfer.
A transaction is successful if the foreign currency is transferred to account with native currency. After a short delay of “account set up”, the user marks his account as “confirmed”. Finally, the transaction is finished up automatically. So basically, cryptocurrency exchange app can be completely automatic except one step: the recipient should mark new account and wallet on it as “confirmed”.
But if money is sent from the confirmed account — it is more complicated and needs to be done in a different way. The best way is to partner with cryptocurrencies debit card issuers. In this case funds don’t need to be withdrawn, instead these debit cards directly can be loaded with cryptocurrency.
For the first option, when all the money are transferred to the national currency, the following things are implemented to the cryptocurrency exchange application:
A backend service that will provide its own API to the website and both Android and iOS cryptocurrency exchange application will have API for:
- Accounts creation
- Money deposit request
- Money sending requests
- Cryptocurrency > Currency exchange proxy APIs
- Bank accounts management
The next thing planned to be implemented into exchange application is a backend portal where the user is able to manage his profile information.
And final stage — is a cryptocurrency exchange application multiplatforming. iOS app has the same functionality as an Android application.
For the complete project implementation, the web-based exchange application should be developed. It must not be perceived as the addition to it. But as the tool for accompanying, and for the best user experience.
Ways of the Project Implementation
The project’s planned functionality can be achieved in two similar ways in terms of UX and backend. The first option is the smartphone cryptocurrency exchange application installed to users device and web based application that looks exactly like iOS or Android app and duplicates app functions. The second option suggested to cut down the development costs and shorten the go-to-market time. A potential startup can begin only with mobile application development and get back to creating a web-based cryptocurrency exchange application later.
We’ve made some calculations of the estimated human resources, time and budget needed for the both cases: simultaneous development of the mobile exchange application and it’s web based tween and a mobile application with the simple basic website.
Time Required for Development of the Cryptocurrency Exchange Application
According to our estimates, this project can be approximately completed in 6 months. We will further display in details the team needed and the engagement time for all specialists separately.
Team Needed for the Development of the Cryptocurrency Exchange Mobile Application and Web Based Application
- 1 Full-Time Backend developer during 6 months at $65/hr to build the backend service, DB, etc. = $62 000
- 1 Android Developer for 6 months at $65/hr to build an Android application = $62 000
- 1 iOS Developer for 6 month at $70/hr to build iOS application = $67 000
- 1 Frontend Web Developer to create frontend and backend websites at $55/hr = $52 000
- 1 Graphic Designer during 4 months at $40/hr to create designs for all the apps and website = $38 000
- 2 QA Engineers during all 6 months at $35/hr who will start testing ASAP = $67 000
- 1 PM who coordinates all the work during all 6 months at $55/hr = $52 000
So altogether the budget for this project is about 400 000 USD.
Team Needed for the Development of the Cryptocurrency Exchange Mobile Application and Basic Web Portal
Let’s have a look at the team and resources needed for the project launch with the web portal that has only basic functions. That means, that the only way to send money — is using cryptocurrency exchange application.
- 1 Full-Time Backend Developer during 6 months at $65/hr to build the backend service, DB, etc = $62 000
- 1 Android Developer for 6 months at $65/hr to build Android application = $62 000
- 1 iOS Developer for 6 month at $70/hr to build iOS application = $67 000
- 1 QA Engineer during all 6 months at $35/hr to start testing ASAP = $33 000
- 1 PM who coordinates all the work during all 6 mo at $55/hr = $52 000
In this case, price will be about 288 000 USD
Project Costs. Comparison of the Onshore and Offshore Development Expenses
The prices mentioned above are relatively cheap for a project of cryptocurrency exchange application with such time frames. Also, we have included estimated costs for the same project outsourced for development into the Western Europian countries like Ukraine or Belarus for comparison. If you’d like to learn more about global outsourcing rates check our 2017 Global Custom Software Development Rates Gude.
Considering aforementioned prices, it may seem not so cheap from some perspective. But if looking far ahead, the deposit now into creating cryptocurrency exchange application will bring great profit acquisition in the future. Its success doesn’t depend on the cryptocurrency state and exchange rate. It is hard to forecast the course of any currency. At the same time, the only thing that can be said for sure is that the interest to cryptocurrency will last for the next years and all the positive and even negative tendencies in that market will lead to the high popularity of such platforms. Summing it all up, this cryptocurrency exchange application won’t depend on cryptocurrency vacillating course, because it depends only on its trading transactions, which will exist permanently.
Cryptocurrencies now are at the center of everybody’s attention. This market is relatively new and still has a lot of space for new creative ideas. At Existek we strongly believe that there are plenty of new heights that can be achieved in this field. We will be glad to see you at our Services Page or if you’d Contact Us directly to discuss how we can help you with your next or existing software project. You can leave your ideas and opinions related to cryptocurrencies, blockchain or other topics in the comment section bellow. All your contributions will be highly appreciated by our team.