Bitcoin and Cryptocurrency Exchange Software Components: What's inside?
Bitcoin and Cryptocurrency Exchange Software Components: What's inside?
The current article will show main items, steps, components and subtleties of starting bitcoin and cryptocurrency exchange platform. 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.
The start of any business is its legal registration company and bank account registration. Cryptocurrency exchange is not an exception. In December 2017, 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 2017, public companies that seemingly are not even connected with information technology, after the introduction of the blockchain, have increased stocks value from 3x-5x times!
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.
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?
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.
In addition, a good way to integrate with the Coinmarketcap API to be aware of which cryptocurrency will soon be implemented.
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.
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 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".
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.
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.
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?
First, several types of hacking:
The following important points are among the vulnerabilities of the system. Injection, malicious code, holes in the firewall or server and of course protection against DDoS attacks. Eventually, almost any cryptocurrency software becomes popular and attackers pay attention to it. How to protect yourself from this? First, choose a trusted and quality development partner.
So, does it make sense to develop your own bitcoin and cryptocurrency exchange platform or software? The short answer is yes. No matter what's happening to bitcoin right now. If it grows, market becoming stronger; if it goes down trading volume dramatically increasing.