With new technology, updated softwares come into fore, cryptocurrency has emerged as a technology that gives us quite a few things. Exchange software is one that has made itself quite noticeable in the last couple of years. With the surge in the price of Bitcoins and other cryptos, the usage of digital currency is now increasing gradually. The rising number of exchanges around the world make it very clear that we are indeed getting prepared for the paradigm shift from fiat to crypto. Those who haven’t yet got familiar with decentralized assets, the biggest question to them is, how do we get hold of cryptocurrency?
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How to buy/sell cryptocurrency?
Cryptocurrency exchange is that platform from where you can buy and sell cryptos. It can be accessed through a website or mobile app and has become very handy for the crypto trader. Many new coins have been introduced since the advent of Bitcoin and they cannot be traded without an exchange. There have been quite a few big names when it comes to crypto exchange such as BitFinex, MintPal, uniDax, etc.
These exchanges have rendered the maintenance of account very easy and efficient. They have bridged the gap between the buyers and sellers significantly, with their help the trading sessions can be easily handled without any issues.
Since the volatility period is going through a while, traders have started to look for more updates on what’s going on in the markets and through an exchange software, this can also be done.
There are certain features which a cryptocurrency exchange must have:
1) Trading of Digital Assets
That is what it is meant for and it should support a high volume of trading with all the features that bring efficiency to the whole system.
2) Multi-Currency Trading Platform
Since there are multiple cryptos existing in the market, the exchange must be compatible with at least the ones which are prominently used.
3) Security
Security is surely a big area of concern as the software deals with assets and most of them deal with fiats such as USD and Euro as well. Some of them also support fork trading.
4) User-Friendly Interface
The exchange software must also have a friendly interface, its entire architecture should support hectic trading with the capacity to handle large volumes as well.
5) Encrypted Wallets
The wallets should be necessarily encrypted as it is essential for security. With encryption, the mechanism gets very stout and it never fails to secure the assets.
6) Compliant Environment
The basic compliance policies such as KYC and AML should be adhered as per the geographical specifications.
7) Platform Adaptability
Crypto users access their assets on different platforms such as Android, Windows and iOS as well. So the system has to work on all of them.
Types of Cryptocurrency Exchange Software:
1. Traditional/Conventional Cryptocurrency Exchange
There are traditional crypto exchanges which act just like a mediator and let the buyers/sellers make their choice. The platform does not play any other part besides facilitating the transactions.
2. Crypto Brokers
We have seen brokers who helps buyer and sellers in the commodity and bullion market, it is the same in cryptosphere as well. They charge a small amount and help you with their knowledge.
3. Direct Trading Exchange Platforms
These platforms are powered with peer-to-peer architecture. The biggest advantage of using this exchange is that there is no middleman allowed and you can directly interact with buying or selling party. Coinbase Pro is an example of such type of trading platforms.
Exchanges are also categorized as per the currency policy, these are the types:
1. Exchanges with Fiat
These platforms use fiat currencies such as EUR, USD to buy cryptocurrencies. BitFlyer and BitFinex are the examples of this exchange.
2. Exchanges with Fork Trading
Fork is a form of trading which is employed particularly with cryptos. Under this system, you can get a coin in exchange another one which shares the same value. The trading takes place on the basis of buying/selling charts, MintPal and uniDAX are the latest examples of it.
Crypto Markets Vs. Internet Users
The rise of internet is often compared with that of cryptocurrency as the former also had a rough journey in the beginning and was dubbed as a hoax just like the latter.
Crypto is going through its initial stage right now and its number of users are very few in comparison to internet’s. With the induction of blockchain in different sectors, possibilities of cryto usage are going up. Also, the potential of this technology is enhancing with the user-base. It is signifying a higher growth percentage which is a great indication of positive changes in the market in future.
According to the statistics, the growth ratio of crypto exchange is getting better day by day. It is making the adaptation of decentralized distributed ledger easier than ever. Globally, the usage of tokens shows that the number of users is only going to increase.
Popular Crypto Exchanges
Let us take a look at the most prominent crypto exchanges across the globe:
1. Binance
The biggest advantage of for the users of this exchange is that they can use it on their phones. It is so far the biggest crypto exchange in terms of user-base.
2. KuCoin
The next biggest name in this list which also enables its users to access the platform on iOS and Android both. It is also consistently working on offering better services to its users to come on the top spot.
3. Bitmex
In the last couple of years, Bitmex has made quite a name for itself by hosting a large mass of crypto traders.
4. CEX
This one is specifically known for its cutting-edge security features and it also charges a very low fee. Therefore, users pay less on CEX with assurance of safety.
5. CoinMama
It is one of the earliest exchange platforms in the crypto domain which allows instant purchase and transfer of BTC and ETH.
6. Bittrex
Like its contemporaries, Bittrex provides a state-of-the-art framework to its users which allows transactions of multiple coins. It offers several options at one place.
7. Changelly
Traders can instantly convert one coin into another of their choice here with high-end security and efficiency.
The ratings earned by the crypto exchange:-
| Exchange | Rating |
| Binance | 9/10 |
| KuCoin | 8/10 |
| Huobi Pro | 6/10 |
| Changelly | 7.5/10 |
| Bittrex | 7/10 |
| Poloniex | 6/10 |
| Bitfinex | 5/10 |
| BitMex | 8/10 |
Merits that decide how good a cryptocurrency exchange is:
1. Currencies Supported
As the number of coins is going up, it is an essential feature for any cryptocurrency exchange to be support as many coins as possible. It is a pivotal factor which decides if your platform will be among the best ones. The top crypto exchanges like Bitfinex allows trading in 39 tokens/coins. Therefore, if you want to make your crypto exchange, make sure that it is ready to host a big number of coins.
2. Countries Supported
Don’t forget crypto is not restricted to a few countries, its reach is increasing day by day. Exchanges like Coinmama, Kraken, and Bittrex can support more than 200 countries. The regulations in a few regions make your platform inaccessible to its citizens. However, it should not prevent you to make your exchange transnational.
3. Low Transaction Fee
Different crypto exchanges follow different business models, so their charges differ. For instance, Coinbase pro charges taker fee and maker fee which are 0.10%-0.30% and 0% respectively. Coinbase has a uniform rate of 4% on all the transactions but waives a little on some selective payment methods. Binance has the lowest transaction fee on its platform which is 0.1%, Kraken charges the maker fee on the volume which is 0.0-0.16% and the taker fee is between 0.10-0.26%.
4. Services Offered
Service is definitely something which cannot be overlooked, especially when the number of exchanges is going up rapidly. The number of features is also growing as new exchanges are coming up with different ideas and concepts. The integration of digital wallet, instant money transfer, insurance protection, and offline storage has become quite a necessary thing now. All these services are now being inducted to allure crypto traders. Security is one domain where you can work and devise something ingenious to get the attention of users across the globe.
5. Latest Technology
The usage of latest technology is indeed a factor that makes your exchange unique. Every platform tries to get the most recent technology deployed in its mechanism because it does something better to the interface, UX/UI, security, etc. The recent updates were aimed at making the environment more friendly for the users. Many exchanges have unique features inbuilt into their platform which makes them different from others. For example, Bitfinex has a charting option and a bunch of indicators explaining every transaction. It also allows the users to indulge in traditional orders like algorithmic trades.
If you compare the features on the different exchanges, you may find Coinbase topping the chart. That’s because of its GDAX platform which makes trading very user-friendly. This particular platform has made the linking and joining of the bank accounts extremely easy. The integration of QR codes and scanning facility is also something which is highly beneficial for every crypto user in the world. The exchanges also come with high-end security features which make the transactions safer than ever. Coinbase takes the security level a step ahead and provides an insurance cover of $250,000 in addition to all the basic features.
Mechanism of Crypto Exchange Software
Cryptocurrency and blockchain are often taken as the same thing. It is right that crypto transactions work on blockchain, they both are different. The former is actually the result of the latter and everything is kept on an open-source decentralized distributed ledger. Crypto can be used only as a currency while blockchain has a much broadened scope of usage. Blockchain is the mechanism on which cryptos work. With this technology, it has become possible to induct decentralization in any industry.
Basics of blockchain:
1. The word is a combination of two different terms ‘block’ and ‘chain’, it secures the data with timestamps and encryption.
2. The mechanism is easy to understand, it allows the data to be stored over an open-source network and secures it with smart contracts which render data indelible and immutable.
3. The data is contained in blocks and keep floating in the network makes it hard for anyone to figure out the location.
4. The constant flow of blocks ensures that the data cannot be changed for good.
5. Blockchain has become a groundbreaking technology which has propounded the concept of keeping the data decentralized instead of saving it in a single location.
6. The entire framwork is decentralized and it rules out absolute control of one entity.
7. It can be created for various business operations in different sizes and intensity.
8. Once the data is submitted, it cannot be changed.
What started back in 2008 with Bitcoin has now become a revolution and the world will accept it sooner or later. Now, we have hundreds of coins/tokens and to host them, we also need a robust cryptocurrency exchange which could handle gazillions of transactions sans a single mistake. With this technology, you can get the best results in any business and that’s the reason it is being adopted in every industry.
The number of digital currencies is approximately 700 existing all over the World Wide Web. Most of the cryptocurrencies are not very popular and you need exchanges to facilitate them. The exchange platforms also have to involve commission cost, limitation, currencies they allow to trade.
Mechanism:
Following the steps mentioned below, you can have the idea of how a crypto exchange works:
1. The crypto exchange lets several traders globally to come together to establish a secure connection.
2. Peer-to-peer architecture is set up for carrying out the transactions.
3. The computer used in establishing the connection is called node.
4. Algorithms are set which attend to multiple nodes and they execute the requested transactions. Cryptocurrency transactions include buying, selling, recording or transferring cryptos.
5. Blocks of data are created to facilitate the combination of multiple transactions.
6. New blocks which consists of new features are aligned to the existing chain.
7. Upon adding to the existing blockchain, the data is indelible and immutable.
8. The transaction is complete now.
Basics of Crypto Exchange Software:
It is necessary for you to understand the basics of this technology before you start developing your own crypto exchange.
1. Security
Since you are dealing with an asset which has a significant value, you cannot take the security lightly. Though blockchain is considered the safest, there have been quite a few instances of breaches on the exchange platforms. The South Korean Bithumb had to bear a loss of around $31.6 billion and also caused a panic across the crypto exchanges. Security is indeed a big reason to worry for exchange owners as well as crypto users.
2. Support to Multiple Cryptos
As the number of currencies is increasing, it is becoming increasingly important to prepare your exchange platform to host multiple coins, then only it could be useful among patient.
3. Fee and Commission
If you are running a cryptocurrency exchange, you are not doing it for charity. Fee and commission are the primary sources of revenue for the owners, but you have to keep it reasonable for traders to bear.
4. Mode of Payment
With more modes of payment, your exchange becomes ready for more traders. That’s why it becomes necessary for an exchange to have a sufficient number of them, it is very helpful in increasing the volume of trade.
5. Geographical Location
Laws and regulations change from place to place and if you want to cover multiple regions, then you would also have to know about the legal complexities in different locations.
6. Ease of Usage
There is not training simulator or dummy exchange available for crypto traders. So it is the platform which has to do it with an easy-to-use interface makes the entire trading experience better.
As per the reports, the cost of Coinbase exchange platform is estimated to be between $57,000 to $98,000. It even got bigger when the platform was made available on the website and mobile application both. The price reached to a staggering $1,32,000 to $1,45,000.
The cost of the development of cryptocurrency exchange depends on how you want to shape it up. The number of features and advancement determines how much the price will go up. The feasibility of the platform and its reach will also be the deciding factors.
It is highly recommended that you do not stick to a particular amount when it comes to expenditure. Always keep a window for the price which would be very helpful in the overall development of the entire project.
Upshot
Cryptocurrency and blockchain together are going to change the way we deal in currency. It has become a very great opportunity for every individual on planet earth. This technology enables you to explore things and implement them wherever you want. Cryptocurrency exchange software development is the right for you and it can make you an absolute champion in this industry.
