With tech pervading our lives in every possible way, our transactions have gotten digital and what with crypto dominating the space for a while now, the power of decentralized trading has gradually taken centerstage. Not being controlled by a central authoritative body, cryptocurrencies enjoy the immunity of policy changes and are not subject to heavy laws. With that being said, it is important to exercise caution while trading with crypto owing to the regulatory bodies that can strike down on crypto activity.
Even if you have a very vague understanding of cryptocurrency, the first thing that probably comes to mind when virtual money is mentioned is Bitcoin. As of 2018, the third most popular search was ‘what is bitcoin?’ indicating its massive popularity. But if you’re a bit more familiar with digital money, you’re aware there are several other cryptocurrency coins apart from Bitcoin like Litecoin, Namecoin, and Ethereum. Well, as cryptocurrency gains popularity, many countries are adopting it as a certified way to make payments and just like with physical currency, it also has to be exchanged to another cryptocurrency for convenience or to more widely accepted and spendable traditional money. That’s exactly when building a cryptocurrency trading exchange becomes crucial.
In cryptocurrency trading exchange, a business is set up to allow customers to exchange cryptocurrencies for traditional money, other digital currencies, and other assets. The person that sets up this market charges a certain fee as commission. There’s a popular saying when it comes to gambling that the house always wins, so you can think of running your own crypto trading platform as owning a casino. It doesn’t matter how much the person wins or loses, the house always gets a cut. But before you dive straight into setting up your private trading exchange, you need to understand what really makes a good crypto trading platform and how to get customers to not only trust you but trade with you.
What it takes to start a crypto trading exchange platform
Before commencing anything, it is important to understand why you intend to build one and take careful steps in planning.
Do your research
You should try to find out everything you can about the current crypto exchange rates in the location you intend on setting up shop, the cost of developing a crypto trading app and what it takes to acquire the right licensing.
You’ll need to form several partnerships in other to create a crypto trading engine that flows smoothly. The first would be in finding a technology company that specializes in building the type you need, another vital partnership you will require is connecting with others to increase your liquidity and obviously establish a bank payment method.
Build a transparent attitude
This not only applies to you, but to your entire team. A clear and honest relationship between you and your users in terms of fees would greatly improve your reputation. You should also create a platform that protects your users’ information and shows value for their security.
Now once you’re all set up with functional software, and fully understand your market through all that research, you need a game plan to be the best. Anyone can set up a crypto trading platform, registration isn’t even legally required in some countries, but there are certain differentiators that help you stay at the top of your game.
Your reputation is everything
Money is a very sensitive issue. No one wants to be on the losing end which is why we’re not encouraged to loan out money to people we’ve just met, let alone those we don’t trust. It’s why crypto exchange apps like Coinbase and Binance are patronized over and over again. Despite their flaws such as limited payment methods, they have established a good reputation as a trustworthy crypto exchange platform.
Variety is the spice of life
No one likes being told they can’t do something, least of all when it involves money. As mentioned earlier, one of the setbacks of the popular crypto trading platform Coinbase is that it offers limited payment methods. One of the easiest ways to become a top contender in a new market is to do it better than your competition, and not just by allowing your users to utilize Paypal, but by also expanding your cryptocurrency coin options and having several exchange rates.
A good cryptocurrency trading exchange is accessible to a lot of people, including beginners. As a startup, it doesn’t do well to block off part of your potential users by making your exchange software to complex and hard for them to understand.
While we’re talking about expanding your user base, we should also mention opening up your exchange software to people in other countries, especially in countries where cryptocurrency is recognized as equally as fiat or traditional money like in Japan or Australia.
It’s much easier and cheaper to keep an old customer than it is to get a new one. When someone already decides to use your crypto trading platform, the last thing they want is to be frustrated by lengthy and unnecessary registration and verification processes before getting their money. While it’s understandable that some of these procedures are necessary for security reasons, this should be cut to the minimum to avoid frustrating your users.
In cryptocurrency trading, you need custom software. Several companies specialize in building such software, and the software can either be monolith or distributed. The monolith system has all its modules in one server, it is the older of the two and although convenient cannot effectively manage too many users. The distributed on the other hand has modules with submodules and thus is faster but the crypto exchange development cost is generally more expensive to acquire and maintain.
Our cryptocurrency exchange building services are differentiated in that they are custom-built for your requirements following thorough research and protocol. Talk to our Blockchain team today and get started on your crypto exchange trading journey.