The cryptocurrency industry is a relatively new and exciting place to explore. There are alot of amazing cryptocurrency exchanges on the internet. However,if you have noticed a gap in the market that you want to fill, this article will give you a guideline on how to create a cryptocurrency exchange.
What is a crytocurrency – how to create a cryptocurrency exchange
A cryptocurrency exchange or a digital currency exchange (DCE) is a platform that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies.
A cryptocurrency exchange can be a market maker that typically takes the bid-ask spreads as a transaction commission for is service or, as a matching platform, simply charges fees
Types of exchanges – how to create a cryptocurrency exchange
1.) Trading Focused Platforms
These are websites that act as a meeting point for buyers and sellers. When the exchange is complete, the exchange charges a fee from the transaction.
2.) Direct Trading Platforms
These platforms offer direct person to person trading where traders from different locations can exchange cryptocurrency in real time. Direct trading exchanges don’t have a fixed market price, instead, each seller sets their own exchange rate. They also charge a fee for the exchange cryptocurrencies.
3.) Brokers Platforms
This type of websites allow traders to visit and buy cryptocurrencies at a price set by the broker. Cryptocurrency brokers operate in a similar pattern with foreign exchange dealers.
Some essencial features and factors to consider of a Crytocurrency exchange – how to create a cryptocurrency exchange
For your cryptocurrency trading platform to appeal to the market, there are some essential features it should have. Although, there is also an open window for you provide innovative features and tools that could create a better trading experience.
1.) High level security
Mastering how to create a cryptocurrency exchange will not be of any use unless alot of attention is fixed on security. For people to trust your platform, you have to prove to them that you are capable of securing there funds and other valuable personal. Intergrating the exchange with a Two-factor authentication also known as 2FA, is a good securing measure. It is a method of confirming user identity by using a combination of two different factors:
i) Requesting for something they know (like your password)
ii) Using something they have (like a 6-digit number they’ll send to your mobile phone or your email address for the second step of the verification.)
2.) Remainder Notification
This will save traders the stress of checking their dashboard all the time. This notification alert the treader via SMS/email or pop-ups when the price of coin fluctuates over a set threshold points. Thus, saving you from missing an important opportunity.
3.) Easy to use and navigate
You have to make your platform easy to use and navigate, fast and efficient. Your crytocurrency exchange should have an highly interactive interface. This should be a solution to the interface of current exchanges that are too complex to understand.
4.) Multiple trading Charts in a Single Window
Currently, most of the exchanges have the facility to view single chart in a tab and other charts can be opened in new tab/window. This feature will attract professional traders who would find it easier to analyze the charts they are interested in all at once. Carrying out the analysis by switching between tabs can be a bit difficult.
5.) Mobile trading app with iOS and Android support
Creating a trading application alone side it’s official website trading platform, makes it easier for users to access and make trades on the move without having to visit the website everytime. With this, you can create a better user experience that will ensure you have a steady base of loyal traders.
6.) User-friendly Interface
Giving your exchange site a sleek, simple and beautiful interface is one of the most Important things to consider when building the exchange. Alot of traders pay attention to the look and feel of the site.
So giving the best UI (user interface) should be one of your main focus in other to positivity affect your UX (user experience).
The website interface is the first thing people see when they visit the exchange. Your user interface should be captivating enough to compel them to join your community on their first visit.
7.) Fiat-to-Crypto and Crypto-to-Crypto support
This function will enable users perform all their exchange actions in one place. It can be a big relief to users ,instead of them paying for multiple transfer fees. This will increase the number of transactions that will occur on your exchange.
8.) Payment processing
Integrating an efficient payment processing gateway API, you would be able to give users the power of adding and withdrawing funds as they please.
In order to be able to convert fiat currency payments to cryptocurrencies, you would need a payment processing partner such as a bank.
9.) Cryptocurrency support
Before deciding on which cryptocurrency to support, a market research has to be carried out. Are you supporting standard ERC-20 (Ethereum based) tokens, then you have your reasons straight.Or do you want to trade just one type of token. Make your market structure as clear as possible.
Guidelines to creating a crytocurrency exchange – how to create a cryptocurrency exchange
To create a fully functional exchange platform, you will need to pay attention to the following details, they include;
1.) An Admin Backend
This provides the of the exchange a simple way to easily add or control configuration settings of the exchange. Some of these configurations include: Changing the trading fee, manage the cryptocurrency listing, add a security layer, upgrade the user interface, add a new cryptocurrency, manually fund accounts in the case of support issues.
2.) Front-end UI
This is an essential part of the exchange to consider. This is because visitors will most likely base their decision to use your platform based on it’s quality. A great deal of expertise has to be put into this part of the exchange.
3.) Cryptocurrency Wallets
After deciding on which crytocurrencies your platform will support, Including some support for cryptocurrency wallet is key because this is where the tokens are stored.
Like I mentioned earlier, consider investing heavily in security. Crytocurrency exchanges wallets are targeted by hackers, resulting in the loss of crytocurrency assets.
4.) Trading Engine
When you set out to build a cryptocurrency exchange, the trade engine is the foundation. The trade engine constitutes the core functionality of your exchange. It handles:
- The execution of transactions
- Calculation of balances
- Makes the calls to access order books
- Matches the buy/sell transactions on an exchange
Conclusion – how to create a cryptocurrency exchange
Setting up a cryptocurrency exchange from scratch is no easy job. By following the guidelines outlined in this post, you should be o. Your way to creating a strong and sustainable product.
Do you have an opinion you would love to share about how to create a cryptocurrency exchange or you have decided to take up a project. We would love to entertain your questions and hear your experience. Do well to drop a comment and share this post.