Blockchain technology has become a buzzword in the last few years. Recently, digital currencies have gained tremendous popularity due to their innovative features, such as decentralization and open-source code. Coins like Bitcoin and Ethereum, as well as any other digital currency you choose, can be bought and sold through crypto exchanges. Cryptocurrency exchanges are platforms that provide an efficient and fair means for people to trade cryptocurrency, hold it, and use it to conduct daily business.
For their services, exchanges charge a fee between 0.1% and 1% of the amount transacted.
Exchanges today come in many forms, but these are the most common:
Brokers – They act as an intermediary between you and the person selling or buying cryptocurrency. Directly selling and buying coins with them means you do not have to find a buyer or seller on your own.
Trading Platforms – Users can trade their crypto coins on the platform after placing appropriate bids on others’ crypto coins on the exchange. There are fees associated with each transaction.
Peer-to-Peer Exchanges – These exchanges enable users to connect with other traders directly to buy and sell crypto coins without any mediation.
What does it take to create cryptocurrency exchange? A cryptocurrency exchange’s platform plays a key role. If you decide to start your own crypto exchange, you need to create a cryptocurrency exchange platform that has all the essential elements listed below:
Customer service desk
If your customers run into any problems while using your platform, you should be available 24/7 via email or phone calls. The service also includes answering registration queries, resolving login issues, fixing technical issues relating to trading platforms, wallets, etc., and handling withdrawal/deposit-related issues. Moreover, you should encourage your clients to write reviews about your business on social media platforms such as Facebook, Twitter, and other websites. Also, you should ask users for feedback about how your exchange is run and what improvements you can make.
Efficient trading engine
Any cryptocurrency exchange relies on a trading engine to process all the transactions between users. If you want your cryptocurrency exchange platform to be successful, the trading engine must be able to process large numbers of transactions per second without interruption or glitches.
Cryptocurrency exchanges handle a significant amount of sensitive customer information, making security a major concern for users. Therefore, when starting crypto exchange, it’s extremely important to ensure that your platform is protected from any cyberattack.
For your customers to trade on your platform, you need to store their digital currencies in the wallets you provide them with. You are responsible for ensuring the safety and security of the funds in these wallets. Holding crypto assets requires you to follow industry standards. Several types of security measures are available, such as cold storage and two-factor authentication, which will ensure the confidentiality of digital currency holdings. Also, your platform should be able to interface with all major digital currencies, such as Bitcoin, Ethereum, Litecoin, etc., seamlessly, so you must have a multi-currency wallet supported by default. You’ll gain more customers if your platform makes more cryptocurrencies accessible.
An escrow system is one of the most important tools for dealing with fraudulent users. Your platform needs an effective and reliable escrow system so buyers and sellers can get their money back if disputes between them arise.
To ensure that your customers can utilize your platform effectively, you need to ensure they have access to reports about their financial activities, profits & losses, and trading histories with all the details about the trading pairs used.
Publicly accessible transaction ledger
A public blockchain lets people see what’s happening when they carry out any operation on the platform. This feature aims to provide your customers with a way to keep track of all the digital currency transactions occurring, including deposits, withdrawals, and purchase and sale orders. To gain the trust of your customers, your business must be completely transparent, which is a critical aspect for startups in the crypto-trading market.
An exchange platform should incorporate some or all of these components to facilitate digital currency trading. So, when you create your crypto exchange, it must have these vital features to be more reliable and trustworthy in your customers’ eyes.