How to Start Your Own Cryptocurrency Exchange Software? [Cost, Working, Platforms]


Written by Hemendra Singh on May 02, 2019 | Updated on: August 10, 2021


How to Start Your Own Cryptocurrency Exchange Software? [Cost, Working, Platforms]

Overview

With the advent of blockchain technology and powerful GPUs, Cryptocurrencies and Cryptocurrency Exchange Software Development have been in the limelight for the last few years. The all-time high relays of Bitcoin, Ethereum, and other cryptocurrencies changed the fortune of many investors across the globe. As per the global report, Bitcoin has almost recorded a profit return of 785% in the last year that’s huge! In fact, no other commodity in the market has provided such high dividends and, this has added much hype to the rise of the “crypto exchange environment.”

Now, the biggest question arises:

How does Cryptocurrency Trading take place?

All thanks to Crypto Exchange Software!

Best Cryptocurrency Exchange Software provide a platform that helps in trading, buying, and selling cryptocurrencies. Montreal, BitFinex, BitFlyer, uniDax, etc. are some of the popular Crypto Exchange platforms widely used across the globe. This software makes it easy for investors to maintain a database and account for all the transactions. They act as an interface or a medium for the buyers and sellers to directly look after the charts and the transaction history along with the volume of the cryptocurrency available for a trading session.

Nowadays, a large number of investors are keeping an eye on stats and making investments in crypto markets. Consequently, there is a need for more stable Cryptocurrency Exchange Software.

The standard features of Cryptocurrency Exchange Software are:

Features of Cryptocurrency exchange software

Trading of Digital Assets

Crypto Exchange Software is a one-stop destination for digital assets. It is a multicurrency trading platform that extends support for high-frequency and SegWit-enabled trading.

Multi-currency Trading Platform

Commonly, most of the software supports major fiat currencies such as Euro, USD, etc. Some of the Crypto Exchange Software also support fork trading.

Security

Crypto Exchange Software has all the latest bank-level defenses to prevent security breaches and hacks. They come with multi-signature authentication features, 3-Point architecture, and DB encryption. Thus, ensure the safety of user holdings and data safety.

User-Friendly Design

These Exchange software come with a user-friendly design. The easy-to-use architecture ensures the easy addition and deletion of cryptocurrencies as per the demands of the user.

Encrypted Wallets

These crypto exchange software provide that both cold and hot wallets follow the latest encryption techniques. In addition to encrypted wallets, they come with multi-signature authentication security.

Trading of Multiple Cryptocurrencies

Crypto Exchange Software allows trading of multiple cryptocurrencies such as Bitcoin, Litecoin, Bitcoin Cash, Bitcoin Gold, Ripple, Ethereum, DashCoin, HCX, AltCoin, and ERC20 tokens at the same platform.

Check for Compliance

This software enables the user to check for compliance based on geography-specific KYC and AML.

Platform Independent

In addition to all the features mentioned above, this software is platform-independent. They work on iOS, Android, Windows, and all the other major systems.

Types of Cryptocurrency Exchange Software:

Based on Working, Crypto Exchange Softwares are of the following types:

1. Traditional/Conventional Cryptocurrency Exchanges

These types of crypto exchanges work like conventional exchanges, where buyers and sellers trade in cryptocurrencies based on the market price. The sole job of a crypto exchange is to act like a mediator facilitating the transaction.

2. Crypto Brokers

Based on the change in currency, brokers help in buying/selling crypto at prices determined by them. These prices are usually the current market price plus a small premium amount.

3. Direct Trading Exchange Platforms

Direct Trading platforms provide peer-to-peer trading options. There is no intermediary exchange involved, and trade directly takes place between buyers and sellers. Thus, they’re easy to use. GDAX (now Coinbase Pro) is an example of direct trading exchange platform.

Also, based on the trading currency policy used by Crypto Exchange Softwares, they are of the following types:

1. Exchanges with Fiat Currencies

These Crypto Exchange Softwares make use of Fiat Currencies like EUR, Dollars, etc. for buying cryptocurrencies such as Bitcoin, Litecoin, etc. BitFinex and BitFlyer are typical examples of Crypto Exchanges with Fiat Currencies Support.

2. Exchanges with Fork Trading

These Crypto Exchange Softwares permit Fork Trading or making use of one primary cryptocurrency to buy equivalent another cryptocurrency on the basis of buying/selling charts. uniDAX and MintPal are typical examples of Crypto Exchanges with Fork Trading Support.

Global Crypto Exchange Market 2019-2024

Taking an insight into the Global Crypto Exchange Market 2019-2024, there are speculations that this sector holds a lot of potential in the upcoming years.

cryptocurrency global performance

(Source: marketsandmarkets.com)

The graph highlights the comparison of expected growth in market size by the year 2024 and the estimated compound annual growth rate between the year 2019-2024 for different countries across the globe.

Crypto Markets v/s Internet Users

Crypto Markets vs Internet Users

Furthermore, while comparing the trajectory of total cryptocurrency traders across the globe to the total number of internet users, the crypto market is still in an early stage, and there’s too much of potential in this sector. The global reports and case studies also add to the fact that there are a fair number of chances for crypto markets to enhance further with the advancements in the blockchain technology and IoT sector. The involvement of people in the crypto sector is somewhat similar to the growth witnessed in the number of internet users during the early days.

The stats further suggest the growth in crypto exchange is directly proportional to the people engaged in using the internet and growth in the number of legit websites as far as the decentralized Applications or Decentralized internet is concerned.

Also, talking about the popularity of some commonly operated crypto exchanges across the globe: Binance tops the table with a rating of 9/10. This Exchange gained a lot of popularity in the last 2-3 years and recently concluded its ICO a few months back.

Popular Crypto Exchanges

Now, let us have an insight into the popular crypto exchanges across the globe:

Binance

This Crypto Exchange offers a mobile app, and this fact makes it the fastest growing exchange in the crypto markets. This Crypto Exchange platform tops the chart in the year 2019.

KuCoin

KuCoin, the next name on our list is famous for the launch of a dedicated mobile app for both iOS and Android platforms. This exchange is working hard and consistently rolling out updates to make their app one of the best in the industry.

Bitmex

Bitmex, the next name on this list is equally popular among the masses for high-volume trading sessions.

CEX

This exchange is my personal favorite as it comes with state-of-the-art security features and charges a low trading fee. Thus, it ensures more profits. Also, it supports superfast transactions.

CoinMama

CoinMama is one of the oldest players in the crypto markets. They allow instant buy and transfer of BTC and ETH.

Bittrex

Like all other exchanges in the list, Bittrex is a high-quality exchange that allows the transaction of different crypto coins in one place. Thus, it provides many options on one platform.

Changelly

Changelly supports instant conversion from one currency to another as per the user’s choice. Thus, making it a wise choice.

The other Crypto Exchanges with the ratings in the market.

Exchange Rating
Binance 9/10
KuCoin 8/10
Huobi Pro 6/10
Changelly 7.5/10
Bittrex 7/10
Poloniex 6/10
Bitfinex 5/10
BitMex 8/10

 

Best Cryptocurrency Exchange Platform in The Market

The best crypto exchange platform in the market is decided based on the factors listed below:

1. Crypto Currencies Supported

The number of supported coins and tokens on the platform plays an essential role in deciding the top Crypto Exchange in the market. Among fiat exchanges, Bittrex is famous for supporting trade in over 100 tokens, while Bitfinex allows trading in around 39 tokens/coins. Some of the popular crypto exchanges like Kraken and Kucoin allow trading in 17 and 12 tokens respectively.

While talking about crypto-to-crypto exchanges, Poloniex supports around 66 tokens and Changelly allows trading in over 100 coins. Likewise, Binance, a rapidly growing Chinese exchange is known for allowing trade in over 350 cryptocurrencies.

2. Countries Supported

Popular fiat exchanges like Bittrex, Coinmama, and Kraken extend their support in about 200+ countries. They are still inaccessible in few states of the U.S. In fact, Coinbase, one of the largest crypto platforms extends its support in only 38 states in the United States. Crypto-to-Crypto exchanges connect people from several countries across the globe for crypto trading.

3. Lowest Transaction Fees

Various crypto exchange platforms charge different transaction fees. For example, Coinbase charges all the transactions at a set base rate of 4% but waves a part of the conversion fee based on the payment method used. The famous Coinbase pro or GDAX platform charges a 0.10%-0.30% taker fee as well as a 0% maker fee. On the other hand, Binance charges around a 0.1% trading fee. Another famous name in the Crypto market, Kraken’s maker fee varies from 0.0-0.16% based on the volume, and the taker fees range between 0.10-0.26%. No doubt, Coinbase has the upper hand in this feature too.

4. Services Offered

The offered services play a vital role in deciding the top player. The more the number of secondary features, the more people find the platform easy-to-use. Hence, digital wallets, insurance protection, instant money transfer, offline storage, etc. are some of the standard services offered on almost every platform to attract investors. Coinbase, a pioneer exchange bags the top spot among all other crypto exchanges as it comes with the latest security and encryption practices. Moreover, it provides insurance security against loss in holdings due to theft for up to a maximum amount of $250,000.

5. Latest Technology

Coinbase beats all other crypto exchange platforms when it comes to the use of state-of-art technology while Bitfinex lies second in this list. Coinbase comes with a better interface and technology. The latest Coinbase Pro platform provides an entirely user-friendly environment. While coming to Bitfinex, has an advanced charting option and a host of indicators depicting every transaction. It also allows traditional orders like market, limit, stop and algorithmic trades like OCO, Iceberg, and Post Only.

Considering all the above points, when it comes to the Best Cryptocurrency Exchange Software in the Market, no doubt Coinbase is the top contender. It comes with the support of the GDAX platform (known as Coinbase Pro). In addition to that, the app provides a user-friendly interface for every kind of investor. The whole process of joining and linking bank accounts is relatively simple. All the coins and tokens can be traded quickly by scanning the unique QR code.

The exchange comes with the latest security protection. Moreover, the best part of using Coinbase is that the FDIC covers under insurance the holdings of every U.S. citizen up to a maximum limit of $250,000. Apart from that, the transaction fee is also very less and legit.

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Working of Crypto Exchange Software

People often confuse blockchain technology with crypto trading and crypto marketing. But in simple terms, cryptocurrency and cryptomarkets are one of the many applications of blockchain technology. Also, blockchain technology has revolutionized the concept of data transfer. Every individual block comprises three things: a cryptographic hash of the existing block, a timestamp, and data involved in the current transaction.

Blockchain: All You Need To Know

1. The term “blockchain” refers to a publicly available worldwide database that is encrypted and loaded with many security features.

2. The working of blockchain is simple to understand. It allows users across the globe to add information to a database and data is spread over a network. Thus, it ensures that no data gets corrupted.

3. The data is continuously flowing over a network, and no copy of data gets stored at a particular location or server.

4. The continuous flow of data over a network ensures that data is not altered from time to time.

5. Blockchain technology has revolutionized the concept of data security as no other technology permitted the free flow of data over a network without storing them on the servers.

6. Besides, this technology is open-source software that allows everyone to create their blockchain.

7. The complete blockchain model is decentralized, and a single party doesn’t have control over it.

8. Therefore, the data once submitted can’t be manipulated again by third-party users.

With the invention of Bitcoin in the year 2008 along with the blockchain sector, people started to develop their cryptocurrencies across the globe with the help of cryptocurrency exchange developer. Thus, a broad crypto market flourished over the years and investors began to make investments in this field.

Currently, around 700 digital currencies are existing all over the World Wide Web. Though most of these cryptocurrencies are not-so-popular, nobody can suspect what comes next! Each Crypto Exchange has its own set of features like the commission cost, limitation, currencies they allow to trade, etc.

Working Of Cryptocurrency Exchange Software

The following image depicts the in-depth view of a simple Crypto Exchange Software:

1. The Crypto Exchange Software allows multiple users across the globe to connect to a secure network.

2. When someone requests a transaction, the request for a peer-to-peer connection is set up.

3. The individual computer involved in p-2-p connection is known as a node.

4. Multiple nodes validate the user’s requested transaction based on the known set algorithm. A valid cryptocurrency transaction involves transfer, record, buying or selling of cryptocurrencies.

5. Multiple transactions are combined to form a new block of data.

6. The next step consists of the addition of the new block to the existing blockchain.

7. Once, the block gets added to the existing blockchain; the data is permanent and unalterable.

8. Finally, the transaction is complete.

Characteristics of Crypto Exchange Software:

While developing a stable crypto exchange software, it is necessary to incorporate the following characteristics:

1. Security:

It is essential for any exchange to come with state-of-art security and encryption practices. It wasn’t a long time ago, the news of hacking of South Korean Exchange Bithumb shocked every crypto trader. The total loss was estimated to be somewhere around $31.6 billion. Also, security is essential to protect the identity of the user and prevent data loss.

2. Supported Cryptocurrencies:

It is vital that Exchange provides users with a one-place destination for trading in all cryptocurrencies and tokens. Since investors don’t have time to switch from one platform to another.

3. Fees and Commissions:

Every trader wants to book the maximum profit. So, it is necessary that an exchange doesn’t charge high fees and commissions as transaction charges can cost a fortune in high-volume trades.

4. Mode of Payment:

Adding multiple payment options ensure more flexibility for traders. Some of the standard modes of payment are cash, credit cards, wire transfer, pay through PayPal, etc.

5. Geographic Location:

Since the laws and the legislature policies differ from place-to-place. The geographic location and laws governing the area also play a vital role in setting up crypto exchange markets.

6. Ease of Use:

Since the crypto traders can’t spend their valuable time learning a sophisticated financial instrument. It’s essential that the website or application comes with an easy-to-use interface.

Cost of Launching Cryptocurrency Exchange:

Crypto Markets vs Internet Users

The report suggests that the cost of launching Coinbase, one of the pioneer cryptocurrency exchange websites is somewhere around in the range of USD 57,000 to USD 98,000.

The total cost of launching both website and application for a cryptocurrency exchange platform will cost between USD 1,32,000 to USD 1,45,000.

The costs mentioned above are approximate figures. However, the figures can vary depending upon the needs of the user and the scope of work. Therefore, one can tell the exact estimate only after the complete analysis of the project based on the feasibility and requirements.

Once, you’re done with the cost estimation almost 80% are prepared to launch your very own Crypto Exchange platform. Now, there are only two things left for you to look at –

A. How to ensure the security of your Cryptocurrency Exchange Software.

B. Type of Crypto Exchange Software you want to set up.

Also Read: Best Cryptocurrency Exchange App Ideas and Differences Between Popular Cryptocurrency Exchanges

Conclusion:

The blockchain technology and Crypto markets hold a lot of potential in the coming years. The high returns and volatility of crypto markets have been a hot talk since the last decade. No wonder why there’s a demand for stable and secure Cryptocurrency trading Software across the globe. As more people are following crypto markets keenly, we hope that this article gives you a better vision for setting up your very own Crypto Exchange.
That’s all from the story. Stay connected to read more!

If any query persists, do notify us in the comments. “We’re happy to help you.”


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