Can You Open Your Own Cryptocurrency Exchange Platform?

Bitcoin turnover is growing from year to year and has reached 20 million tokens, but people still have a limited number of ways to cash out coins. This is because digital currency isn’t legal in all countries, and miners have to constantly convert their coins into cash. To ensure the continuity of transactions, people use a variety of platforms, which are more and more every year. 

On October 22, 2015, the ECJ ruled that exchanges of BTC for fiat currencies are exempt from VAT. So, many investors should seriously consider starting an exchange. To do this promising business, of course, people have to create their own website. This is costly because any trading platform must work 24/7 and the owners of such sites have to hire developers, analysts, lawyers, and other specialists. But this is not the only nuance that every investor should take into account. Let’s look at this in detail.

Buying & Selling Cryptocurrencies — Basic Trading Tools

The most popular cryptocurrencies used for deposits are BTC, Ethereum, and Litecoin. Such coins are legalized in a number of countries. This is worth considering when starting a business. Equally important is how the exchange will be carried out. If we talk about software, the opening of a cryptocurrency exchanger is associated with the following:

  1. Building a commercial CMS. Without this basic part, the entire platform cannot operate. Any reliable trading provides access to the order book, and comply with all data exchange and encryption standards. If these requirements are not met, there is a high probability that the resource will be blocked by providers.
  2. Front-end web development & User interface. This part must be configured for fast and smooth trading and transactions. Most customers want to find their accounts easily and intuitively, and see all significant currency fluctuations as soon as possible. The same goes for deposit cryptocurrencies or fiat currencies, and place any orders.
  3. Accounting. The e-wallets for digital currencies that you host on your website should be very quick and easy to verify. But you must also ensure secure transactions for withdrawing virtual money and converting it to fiat currency. 
  4. Administering web resources. Without a dashboard, the executing trades as well as validating processes, monitoring liquidity, and providing helpful and professional customer support will be void. For such tasks, you will have to hire a developer and analysts.

In addition to making deals via websites, crypto exchange owners have to develop mobile applications. Without this, the reach of users who have opened accounts on the platform will be several times less than that of competitors. You can check how it works on the example of the ICOholder website. This project quickly became popular precisely because of the easy access from mobile devices.

Cryptocurrency CFD Trading 

With any bitcoin exchange site, registered users can buy and sell cryptocurrency, track exchange rates, and store their private keys. That’s why all owners of such platforms will have to pay the most attention to the level of security and payment options. Without such accents, a startup is unlikely to be successful. Besides, it’s worth understanding the difference between buying/selling cryptocurrencies on the exchange and CFDs. In both cases, trading is associated with making a profit. But not everything is so simple with the legalization of business.

Transaction Processing 

Buying and selling digital cryptocurrencies is essentially the use of one cryptocurrency, such as BTC, to exchange it for another coin, such as Ethereum. Due to the lack of a direct wallet-to-wallet sending money, such a process includes finding a contractor. Operations through exchangers are performed twice. When creating a business plan, people should consider the commission in each case.

Cryptocurrency exchanges generally accept deposits and withdrawals in two ways. Some exchanges (mainly in the US and UK) accept fiat deposits or a combination of fiat and crypto deposit methods. But, most exchanges in the world are adopting crypto-based trading methods due to the restrictions imposed by banks on such exchanges.

In Summary

Recently, the mining of crypto coins in some countries has become more difficult and even illegal. This is why experts refer to other ways to make money from digital currency. Today’s technology market fully facilitates those wishing to create their own exchange startups. The average cost of developing a cryptocurrency exchange is $25,500. Working with an agency from Eastern Europe, you can recoup your investment in 3-4 years.

Crypto exchanger owners will inevitably enter into contracts with banks or payment service providers. So, it’s very important to choose a reliable bank, with a wide range of exchange rates. It is better to withdraw funds through regions where cryptocurrencies are accepted as a regular means of payment, such as the United States or Scandinavian countries.

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