Cryptocurrency exchange software components
There are three different ways to build cryptocurrency exchange software. The first is to use the white label Cryptocurrency Exchange Software Components, the second is to modify the open-source and the third is to develop a new cryptocurrency exchange. Let’s see the pros and cons of each solution.
White label exchange software
Some companies offer white-label cryptocurrency software. Even OKEx, one of the largest cryptocurrency exchanges, announced the launch of a white-label service. You only have to buy a ready-made solution, adjust its design according to your requirements.
Cryptocurrency Exchange Software Components White label exchange software
Quick deployment: You don’t need to build anything. All you have to do is deploy, install and configure it in your requirement.
High reliability: When you buy a white-label website, you can be sure that it will work reliably.
Reasonable price: Buying a ready-made solution is cheaper than developing it from scratch. Self-hosting solutions cost an average of $ 30,000-50,000 annually when internal development costs around $ 200,000.
Low flexibility: White label software vendors rarely allow customers to change design and functionality significantly. This is why many exchange platforms look very similar and the same features.
Reduced profit: The price of white-label exchange software usually includes a one-time activation fee Cryptocurrency Exchange Software Components or monthly/annual fee. In addition, suppliers often consider commissions based on exchange volume. You have to pay even if your profits are low.
Difficulties in support: Because providers have many customers, you may have difficulties in getting quick support. It may take a long time to find an internal developer to maintain your bitcoin exchange site because of the specificity of the project.
Open source cryptocurrency exchange solutions
Free: you don’t have to pay for using open source solutions
Short deployment time: Because open source software has all the core functions, you can deploy your exchange quickly.
Poor reliability: Some open source solutions lack quality because they have never been thoroughly tested.
Weak security: It is very difficult to have a highly secure open-source solution with database encryption. Sometimes owners stop developing solutions and you have to solve all the problems yourself.
Develop a customizable cryptocurrency exchange
The 3rd way to build your very own bitcoin exchange site is to build a new cryptocurrency exchange. Hence, It requires more efforts but brings greater profits to exchange owners.
High security: A team of strong expertise in developing cryptocurrency exchange websites can provide secure software such as banking systems. Hence, Developers have experience in private key security; DDoS attack protection, two-factor authentication, etc.
All profits are yours: You don’t have to share your profits with others. It means you earn more money, as well as setting up lower transaction fees for customers. Stories of OKEx and Binance show successes come from small fees.
Long-term project: It often takes 6 months to build a new cryptocurrency exchange website. Hence, Large projects with large numbers of features may take a year or longer.
Difficulties in finding experts: cryptocurrency exchange is a new major. The first exchange appeared in 2010 and currently only has about 200 successful operating platforms. That is why there are not many experienced cryptocurrency exchange developers in the world.
Huge cost: In order to hire a dedicated development team, you have to spend about $ 200,000
Types of Cryptocurrency Exchange
As written above, choosing software and technology is really vital. However, before you develop your exchange Cryptocurrency Exchange Software Components you must decide: which type of exchange you choose? There are two popular types of cryptocurrency exchange:
Centralized: Centralized exchange is intermediaries between buyers and sellers, handling their assets and earning transaction fees. Hence, Such platforms have highly liquid, fast transactions. Hence, But centralized exchanges are less secure because customers must provide private keys to transfer their digital assets from wallets to exchanges, which could lead to key logging attacks.
Decentralized exchanges: Hence, All transactions here are peer-to-peer, they are implemented directly among users through smart contracts, so there does not have an intermediary. Hence, Only users can manage their assets and private keys. However, this platform has higher entry barriers and slower transactions. Therefore, liquidity and trading volume are much lower.
Developing a Cryptocurrency Exchange
In order to build a trading platform, it is necessary to select an architecture. There are three main types:
Each feature of exchange runs as a separate layer, usually located on a different machine or server. Hence, Most exchanges are asynchronous;
Distribution (large): It is similar to an asynchronous type, but it divides customer requests into segments. These segments operate independently and based on such an exchange cloud-scale can grow infinitely.
Vital elements of Cryptocurrency Exchange Software Components
The exchange is a slightly complex structure. Cryptocurrency Exchange Software Components Hence, We will explore the key elements that are important for the operation of the trading platform.
Effective user management is very essential for a cryptocurrency exchange website. In early 2018, some crypto exchanges had about 100,000 users per day. It leads to significant delays in account creation.
Login / Register: Although exchanges require a lot of personal user data, their registration is very simple. This helps users register quickly and easily. In some cases, some exchanges developer uses Google Authenticator to deploy 2-step verification service.
Create users: Most exchanges allow users to create accounts themselves. But some platforms are for small groups of people, like customers or partners. In this case, the user is created by the administrator.
User Verification (KYC): Identity verification procedures are needed to comply with Know your customers (KYC). Cryptocurrency Exchange Software Components Hence, Most exchanges offer multiple types of verification that define account limits. Types of verification may include phone numbers, personal details, photo ID, SSN, etc.
The cryptocurrency wallet is a software program that allows people to deposit and withdrawal cryptocurrency (coin).
User wallet and system: Hence, Different types of wallets can be provided to users: hot and cold Cold, mobile and desktops wallets, etc. The cryptocurrency of the platform is kept in the system wallet.
Deposit / Withdrawal: Users can deposit or withdraw money by wire transfer, QR code, email, ATM, etc. Normally, deposits and cryptocurrency transactions are allowed without account verification. But to withdraw money, you need to verify your account.
Transactions: Hence, Every user will be able to buy currency and sell it to other users. Hence, It is important to focus on transaction speed and smoothness (no system errors). The ability to create orders allows users to choose the most convenient order at the moment.