The popularity of cryptocurrency has reached greater heights over the past few years and it has become a topic of discussion even outside tech circles. In certain places, the likes of Bitcoin, Ethereum and LiteCoin have been used very frequently similar to fiat currencies such as the Dollar and Euro. All the transactions are made through a cryptocurrency wallet.
Even though the value of fiat currency will always be on top, there is a general perception that cryptocurrencies exchange will eventually change the banking system and even replace them entirely one day. Despite the fluctuations in the value of cryptocurrencies and continuous price drops, digital currencies such as Bitcoin and Ethereum are still thriving and there is plenty of room for new ventures to take a piece of it. If you are planning to create your own Cryptocurrency exchange software this article will help you in understanding the nuances of crafting a cryptocurrency exchange and the costs behind it.
Types of cryptocurrency exchanges
Before we proceed to the development side, let’s look at the types of crypto-exchanges that exist in the market today.
There are direct trade platforms that provide tools for brokering immediate deals between users. These exchange platforms do not involve any pre-established market price, instead, the traders will be setting their own exchange rates.
Then there are Brokerage platforms that can be used by any person to buy the currencies/tokens set by a cryptocurrency agent.
- Apart from these, Cryptocurrency fund platforms which are investment pools with professional management where one can buy and hold virtual assets.
Now that we have understood the type of exchanges, let’s look at what are the tools required for the creation of the exchange platform.
You will require order lists- A table which represents all the transactions made by the market players
Charts that display digital currencies volatility index. They can be used to compare different trading pairs before making transactions.
A complete detailed history of the most profitable transactions for qualitative analysis. This will be beneficial for determining bidder’s demands as well as more accurate forecasting, which is the basis of any trade.
Determine the time and budget restraints
Since the exchange software is highly complex, its development and debugging can take a whole year or even more. Keep in mind about the time involved, the professionalism of your developer team heavily influences the amount of required time. Remember that while developing software, employees must receive wages that depend on the complexity of tasks involved. To create such a program, you will need a team of experienced developers as a single IT specialist will not be enough for such a task. It is clear that a qualified team requires investing a lot of resources. Therefore, be patient, because when it comes to cryptocurrencies, you need a trading platform that has been crafted to perfection.
Creating a user account system is imperial for your cryptocurrency exchange development. In a typical user profile, the customer has to be identified, and there must be an option for depositing and withdrawing currency. With the help of the platform, investors will be able to manipulate their market positions.
Among other things, you will definitely require an aggregator. Using an aggregator, users can create their own coins or tokens and put it on the list of assets immediately. The aggregator usually processes a large amount of information every second and that’s one of the reasons it’s pretty expensive.
A Trading kernel is a must, without the trading kernel, the currency exchange will not function. The purpose of the trading kernel is to create the order book, carry out the transaction and calculate the balance.
Last but not least the currency exchange platform must have a user-friendly intuitive interface. This design should invoke attention from the customers. The interface should adapt itself or smartphones, tablets, and other devices. Custom-made mobile applications will make your exchange even more attractive and user-friendly.
An interface should provide the user with the following features:
- Quick registration process
- Deposition and withdrawal of cryptocurrencies and fiat currencies
- Complete access to trading accounts
- Booking history & review of past transactions
- Statistical monitoring
- 24/7 customer support
- Vibrant infographics and charts
Creating a wallet is absolutely vital for cryptocurrency exchange development. The client will use it to store the cryptocurrency and it will also ensure complete security of the users’ wallets. To minimize all risks, wallets should be divided into two groups- Hot wallets and cold wallets
Hot wallets will allow users to export currency to an external wallet. The money that has been withdrawn does not require the approval of the exchange administrator. Cold wallets contain the remaining coins or tokens that have not been used. No one will be able to access a cold wallet if a hot wallet has been hacked, as the cold one is completely disconnected from the network. Therefore, users prefer to keep the main part of their assets in the cold wallet.
The prices associated with the development of cryptocurrency exchange might seem a tad expensive, however, it should be noted that Cryptocurrencies are bound to grow over the next few years as the popularity of cryptocurrencies increases. Similar to fiat currencies, their value will keep fluctuating. The market for these digital currencies is still new and has a lot of potential for improvement.
If you have any further queries regarding the development of white label crypto exchange software please feel free to contact us, we have a readymade solution for you.