The popularity of cryptocurrencies as a medium of exchange worldwide has soared to great heights. In fact, Bitcoin’s popularity continues to grow every passing month. In such a promising market, entrepreneurs and opportunity-seekers want to leverage the opportunity to enter the market with a crypto product. And in a state of massive hype, what can be better than a cryptocurrency exchange app?
The demand for cryptocurrency exchange apps will continue to rise with the growing trading volumes worldwide. In such a scenario, launching a high-end crypto exchange app is far better choice than thinking of ways to mine bitcoin tokens. By being an intermediary and handling transactions efficiently, an entrepreneur can earn enormously.
The global blockchain market size is expected to reach $57 million by 2025.
The Rise of Cryptocurrency Exchanges
As bitcoins gained popularity, businesses worldwide sought ways to trade in bitcoins. This led to the development of a massive opportunity in cryptocurrency exchange segment. A crypto exchange facilitates trading in cryptocurrencies using fiat currencies like Dollar (USD), Rupee (INR), Yen, etc. Using an exchange, users can buy or sell cryptocurrencies easily and book profits in short and long-term.
Developing a cryptocurrency exchange: Points to ponder
• Operational scope
Before anything else, it will be important to set the operational scope of your cryptocurrency exchange. This is essential as you will be required to get necessary approvals according to the operational scope. You will have to think about licensing and registering the exchange according to the local or global laws.
• Regulations and compliance
Cryptocurrency is a hot arena and nearly all the governments around the globe are stern on use of cryptocurrencies and exchanges. As someone who wishes to start a cryptocurrency exchange, your business will be required to adhere to KYC norms. This means you will be required to get documents to verify the identity of customers and keep a record of the same. This is essential to eliminate the chances of money laundering through cryptocurrency trading.
To comply with regulations, it is important to integrate a customer verification API in the exchange and develop a backend database to keep a proper record.
• Payment processing
In order to be able to convert fiat currency payments to cryptocurrencies, you would need a payment processing partner such as a bank. Keep in mind the trade settlement cycles of banks in underdeveloped countries if you are based in one.
With the help of an efficient payment processing partner and a payment gateway API, you would be able to give users the power of adding and withdrawing funds as they please.
• Liquidity management
Liquidity is an important aspect for the success of a cryptocurrency exchange marketplace. The trades at an exchange drive its liquidity position and without bustling trading activity, no cryptocurrency exchange can survive. In order to manage liquidity at your exchange, you will need to integrate your cryptocurrency exchange’s liquidity position to other existing exchanges.
This can be done with the help of a modern API interface that shares liquidity and trade volume data between two exchanges. Being a part of crypto exchange network is also beneficial in improving liquidity position.
• Build High-grade security standards for customer data
It is always risky to make investments but with Cryptocurrency it all becomes so easier and secure. Cryptocurrency exchanges are such platforms that offer a medium to buy and sell digital currencies and there are around 500 exchanges to get chosen from as per bitcoin.com. So opt for good research, read relevant reviews, and have a fruitful conversation with experienced investors before taking any decision.
• Create customer support channel
The customer support channel has become a must thing for every software or product to add in it. For providing instant answers to all the queries of your customers, an interactive customer support channel will play a major role. When it’s about cryptocurrency exchange then you must adopt a customer support channel and provide the best assistance to your customer base.
• Cryptocurrency support
According to Coinmarketcap, there are more than 1500 active cryptocurrencies in the market. In fact, the rate of introduction of new cryptocurrencies spiked with the introduction of Ethereum platform that offered the ability to launch a new cryptocurrency without much hassle. In a competitive era, it is important to decide the number of cryptocurrencies the exchange will support.
The greater number of cryptocurrencies a platform support, heavier will be the investment in the development of dedicated APIs to fetch historical values, real-time charts and placing buy and sell orders.
Essential components of a cryptocurrency exchange app
Once you are through with major decisions regarding cryptocurrency exchange business, you need to get a clarity about the basic architecture of a cryptocurrency exchange app. Any cryptocurrency exchange app has to be fast, intuitive and highly-functional in order to succeed. For meeting these objectives, the app should possess the following components:
1. Trading Engine
2. Front-end User Interface
3. Cryptocurrency Wallet
4. Admin Console
Apart from these basic features, every cryptocurrency exchange app should have additional features that can be developed after gathering user feedback or by analyzing the top exchange apps worldwide. Let’s have a look at the critical components of the app in detail:
A trading engine serves as the core of any exchange and runs the operations. It is essential to execute transactions, calculate balances, access order book and match all the buy/sell transactions on an exchange.
Setting up a trading engine should be a priority while building a cryptocurrency app. Without a functional engine, a cryptocurrency app is nothing but an empty shell without any value.
Front-end user interface
This component is particularly the face of your exchange, i.e. how users see the exchange. Make sure to build a user-friendly and intuitive interface with a minimalistic approach to offer an amazing trading experience. Keeping the clutter away will enhance the simplicity quotient, making it easier for users to execute trade orders. While building this component ensure that it has the following functionalities:
- User registration and login
- Fund deposit/withdrawal
- View order book, transactions, balance, statistics, charts, etc.
- Buy/sell orders
- Support features
Embedding support for a cryptocurrency wallet is essential for a crypto exchange. All the crypto tokens/coins will be stored in the user’s wallet. Developing a wallet solution with enhanced security will help in the development of trust between users and your cryptocurrency exchange.
A wallet is a daemon on the exchange server that can be integrated into the cryptocurrency exchange app with the help of a script or API that suits the purpose.
An admin console will help the exchange operator/owner to manage different operational aspects of a cryptocurrency exchange. The features of a console can be customized according to the specific business requirement but generally, every admin console must have the option to edit trading fee, managing cryptocurrency listing, adding new currencies, crediting/debiting funds to wallets and addressing support issues.
How will I get exchange software?
· In-house development
· Using Open-source script
· White label exchange software
How much time and cost does it involve to build a cryptocurrency app?
There is no doubt in saying that the popularity of cryptocurrency has been evolved. Now every business is thinking to develop its cryptocurrency app. But one question always revolves in their mind and i.e. how much time and cost does it involved to create a cryptocurrency app?
To know this answer, it is important to first understand the whole process methodology which is involved in the cryptocurrency app development.
Incorporating the above components into an app will surely lead to a highly-functional cryptocurrency exchange app. If you seek expert assistance or complete development support with regards to cryptocurrency exchange, Intuz can help. Intuz’ expert team has strong knowledge about relevant APIs, development stacks, and solutions that can accelerate the pace of cryptocurrency exchange development. With this, any entrepreneur can roll out a highly-efficient cryptocurrency exchange app without getting into the hassle of understanding the technical aspects. Looking for expert tips or guide? Contact Intuz today!
Also check my new article on: How to Launch And Market Your Own Cryptocurrency/ICO
I hope this may help you to understand basics of cryptocurrency app exchange. The article was originally posted at Intuz.com