Every day more and more people learn about cryptocurrency. Accordingly, the demand for cryptocurrency exchanges is growing. And what it is and how to create it, we will figure it out today.
What it is?
Let’s start with the definition, a cryptocurrency exchange is a place where we can buy and sell bitcoin and altcoins, as well as perform other important operations. And if you need help with this, you can contact the cryptocurrency exchange development company – Unicsoft.
The creation of an exchange is a very serious process that requires certain knowledge. And today we will analyze the main points that are necessary for the development of such a project.
License and legal nuances
The first thing to do is to study all the legal aspects related to the licensing of cryptocurrency exchanges. Make sure all requirements from the regulator are met. A license is required for all jurisdictions. Most of the reputable cryptocurrency platforms currently operate under the supervision of financial regulators.
In addition, exchanges are required to implement a Know your customer system aimed at countering money laundering. The rules may differ in each jurisdiction. Therefore, it is important to thoroughly understand this issue, after consulting with a lawyer who understands the specifics of this field of activity.
To implement such a large-scale project, it is necessary to adequately calculate the amount of future costs. There are many factors to consider. If you plan to tackle these difficulties yourself, the most important thing is to assess the time and financial expenses of creation, maintenance, and systematic software updates.
Building software from scratch is expensive. In addition, this task will take about a year to complete. On average, you may need from 500,000 USD. Note that it is not necessary to have this amount right away. The costs will go gradually, but in any case, you need to calculate in advance the budget for the creation and maintenance of the exchange.
Liquidity is a key factor in the success of an exchange. Your project will be taken seriously when there is trading activity and a book order. Otherwise, it is almost impossible to compete with other crypto-exchanges, especially in the early days of the new platform.
Some exchanges have caught on using bogus records. This was done to simulate trading activity. Doing so is extremely risky. You can completely ruin your reputation. It is better to find a reliable liquidity provider with a large network of existing exchanges in the cryptocurrency market.
Each payment system has its own characteristics and rules. Choose options with affordable rates and low commissions. This will allow you to compete with other similar projects.
Payment systems also differ in terms of settlement time, PCI DSS compliance, methods and tools to protect against fraudulent activities. It will be feasible to incorporate a digital currency payment gateway into the latter, allowing your users to transact electronic assets.
Protection against hacker attacks
The cybercriminal world is always on the lookout for digital currencies. As a result, their actions continue to put exchanges at risk.. Security for a cryptocurrency exchange is one of the key factors. Spend as much time and resources as possible on this task.
Measures aimed at maintaining the required level of security can include a system of cold, warm and hot wallets, as well as two-factor authentication, database encryption and anti-phishing features.
After completing the development of the software, and following the steps listed above, you need to make sure that your exchange is working at a high level in the beta version.
The experience of the first users of the site must be passed on to the developers for analysis and making edits, so that the result can be a full-fledged launch of the project. Beta testing is often done behind the scenes. In addition, it can be used as a news feed to promote the crypto exchange among the target audience.
To create a cryptocurrency exchange, you need to go through each of the above stages. However, before that you need to study everything, evaluate your capabilities and get more info.