Cryptocurrency Exchange Software - Price and Types

The current article will show main items, steps, components and subtleties of starting cryptocurrency exchange. This article is recommended for reading to investors, entrepreneurs, businesspersons and even crypto-enthusiasts and traders.

As you know, the Cryptocurrency market is uncontrollable and this is the only reason why some still mistrust it. In a way, it can be called a bubble - after all, investing, say in bitcoin or litecoin, and have lost money on this - the Government will not help you. In this case, you should understand that there are risks. You can earn money or lose them. Nevertheless, this industry continues to develop rapidly. Cryptocurrency platforms software is one of the ways to make money. But how? What do you need to know when choosing a trading software for cryptocurrency? In general, when starting a company and the primary requirements.

Company Registration

The start of any business is its legal registration company and bank account registration. Cryptocurrency exchange is not an exception. A few years ago, Belarus announced the legalization of the Crypto-currency, in particular, bitcoin. How will this affect the market and this industry? By this step, Belarus said that it is ready to be the world center and jurisdiction cryptocurrency and is ready to be tax-free country. Whether this will be so in reality, only time will show. At the end of last year, many inhabitants of this planet found Belarus.

Among other popular countries of registration of the company is to distinguish separate US states, such as Texas. Singapore is also on this list. Although the main recommendation still remains the same - choose the country whose laws you know well, and which in the future will help you develop your platform, not ruin it. Special attention deserves blockchain, especially in healthcare. Over the past several years, public companies that seemingly are not even connected with information technology, after the introduction of the blockchain, have increased stock value from 3x-5x times! Blockchain and bitcoin, although often used in the media together, are different concepts. A stable asset for investing bitcoin dictates the popularity of using blockchain as a technology.

KYC&AML

Members of the cryptocurrency exchange software are its users. It helps the business to grow. There are only a few important points at this stage:

1. KYC (Know Your Customer)


2. AML (Anti-Money Laundering)

The second point is much easier (not all jurisdictions ask for it). Regarding the first point, obviously, you should know your customers. User identification is the most important in the crypto exchange. How deep do you need to know? The minimum requirements are verification by international passport, ID or driver's license. Australia, for example, requires utility bills, address registration or bank payment. Generally, it is considered that there are 2 key stages of verification (no, this is not a phone nor an email): verification of the identity and verification of the address.

For example, some implement very strict requirements for verification of identity - you need a personal presence through a web camera or verification through the front camera. Interesting to note, user's regulation and verification is quite typical for many sites, such as Amazon or Etsy.

According to the rules, the user gets full permissions only after verification. Then he can conduct trading activities and deposit his wallets. Cryptocurrency is becoming more controlled. Given the latest changes in the legislation of the United States and European countries, the use of CUS is mandatory. There are two types of CUS integration into the exchange software:
- Provider. An external provider is used to verify the identity of the user. All documents are stored and verification takes place separately on the provider's website. After confirming your identity, an automatic redirect to your platform is carried out. Very comfortable but not cheap. The cost of one verification is about $0.5.
- Manual. The user uploads documents to the platform. The administrator in the dashboard will check and verify the identity.

Components

Cryptocurrency exchange software must include the following components:

1. Design.


2. Trading engine.


3. Liquidity.


4. Cryptocurrency wallets.


5. Market maker (optional).


6. Dashboard.


7. Security.

This is the list of the main components, without them new exchange software simply does not survive. Without dashboard, there will be no control and clarity, insufficient liquidity can simply not give a starting point for growth, and a vulnerable system can completely ruin everything.

Design

This module, though more correctly, the component should be designed not only visually attractive but also convenient, taking into account national, social and local preferences of the users themselves.

Once scientists conducted an experiment, trying to figure out how long it would take a user (never before to use social networks) to sort out the largest social network Facebook. I will not go into details, the result was 57 minutes! Just imagine how you show your distant relative from another country Facebook and he needs an hour to understand why and how to use Facebook.

However, the users of cryptocurrencies exchanges are not novices nor newbies in technologies. At least they are tech-savvy, interested in development, making money and investments, banking system and politics. This you keep in mind designing a cryptocurrency exchange software. User experience should be at the highest level, everything should be super easy. As if you already knew the navigation, structure, and results for the very first time. And, of course, you have to take care about making it top-notch.

Design plays a secondary role. First, it is UX. Intuitive and simplicity are key features. A small note: cryptocurrencies are still growing in popularity; this industry is not even at a peak. Many newcomers have never traded. Do you see the hint? For example, one of the crypto exchange software designs that was developed by our team in our case study.

Dashboard

Needless to say, that for any platform and even a website, the content management system (CMS) is necessary. Under a private admin system, there should be a wide range of features and data so that the owner can see the current situation in a few clicks.

Among the necessary features is a dashboard with key indicators of transactions, users, deposits, etc. The project should have the possibility of manual withdrawal of money and flexible adjustment of a fee. One of the features that many owners ignore is the interest in this or that cryptocurrency in your system. An analysis of this will help you make an effective marketing campaign. Below you can see how the dashboard of one of our crypto exchange software looks like.

Trading engine

Without this peer-to-peer component, the software cannot work properly. What is important to take into account here? It is very simple: users must create orders freely and safely. All data, transactions, order lists and bookings should be stored and displayed to the user in convenient charts on any device.

We have made a huge amount of software for crypto exchanges and I can say one thing. This module is the most problematic. At the first stage, it was difficult for us to make code that can withstand heavy loads. We have rewritten and improved it several times. Our first program in 2017 could handle about ten transactions per second. Now we have expanded the capabilities of the software and offer different bandwidth options.

Liquidity

Let us imagine for a moment that the platform you build in your head already work. It has all necessary features: sign up, log in, verification, orders etc. All features have been tested several times. Now it is time to sign up a real user. He went through all stages of verification and is ready to deposit money into the system and suddenly pays attention to the order list of buying and selling cryptocurrency. Then his gaze caught an empty list in the system "there is no turnover of money" and already begins to seriously doubt it - whether to do depositing.

The liquidity of such a platform is equal to 0. Makers and takers do not exist and it is understandable why - you just started today. What, then, we have to do?

Option one - to simulate liquidity. Here artificial intelligence and trading bots and use liquidity provider help us. The essence is very simple: we create bots (takers and makers). And voila. A new user will see these orders and be able to interact with them, that is, buy or sell their currency. Having such tools of liquidity is much easier to help a person to start a new trader way.

The another option is sharing liquidity with external platform. For example, with Kraken or Poloniex or even Binance. And if you don't want to rely only on one exchange - make integration to many. As traders say - "Diversification".

Cryptocurrency wallets

Most exciting item. Maybe you are a true bitcoin enthusiast or Ethereum - from the point of view of system design, this plays little role. It is important to make it user-friendly.

Obviously, the more cryptocurrency you allow your users - the more possible transactions. However, is everything so easy? It turns out not quite. Taking into account the peculiarities of the cryptocurrency and that they are all independent and decentralized. Under building decentralized exchange we mean the user wallets are decentralized. From a technical point of view, we must integrate them in a manual mode, one by one. First, this affects the time of the implementation of the wallet, and consequently the budget for the development of crypto software.

There are 2-3 main types of wallets. A hot wallet, cold wallet, and deep-frozen wallet. However, this is a topic for another article.

Security

Edward Snowden was the first who drew his attention to this and discovered it to others. Security, protection, and privacy of data have become an issue. Especially for financial portals and social networks like Facebook. So what is security for a cryptocurrency exchange software? What do you need to take into account?