Get to know how to create a Cryptocurrency Trading Platform
Cryptocurrencies have witnessed the biggest growth in the past decade. Despite the risks involved due to its volatility, people are interested in the digital asset to make a quick buck.
The steps to follow for creating your own Bitcoin Trading Platform
- Determine the type of Cryptocurrency Trading platform – One of the common types of platforms that suit new traders is the Admin user. Trading is executed directly between a user and the exchange. Peer to Peer platforms promotes more privacy and anonymity among users. Admins can also participate in buying or selling by acting as ordinary participants. The commission will be earned by the owners from the trades executed. Decentralized exchanges are another type of platform which provides more freedom in decision making for users.
- Fix the jurisdiction – Since all countries are not friendly towards the operation of cryptocurrencies, it is ideal to know the laws and regulations of each territory before venturing into a market. Some nations such as Malta, Singapore, Switzerland, Canada, Japan welcome the existence of cryptocurrencies. The process of obtaining an exchange is very simple in these countries. Mexico allows cryptocurrency exchanges to function without registration. However, all platforms must have sufficient funding and legal support. Wallers must also be developed for accepting cryptocurrencies as well as fiat currencies for processing transactions.
- Develop an experienced team – Hire people who have knowledge in different areas such as website designing, software development, marketing, and accounting. Their experience and skill sets will determine the success of your Bitcoin trading platform. Make sure that speed and a comfortable user interface is not compromised.
- Discover the main modules of the platform – Monolithic, Modular, and Distributed systems are the three options present for a Cryptocurrency trading platform. In monolithic platforms, all modules are present on a single server. It will not be suitable for big organizations due to its small efficiency and it cannot process a large number of requests. Modular systems give a higher speed as each item is installed on different servers. Distributed systems suit large projects as each module is simultaneously installed on various servers. Though the cost is on the higher side, it increases the throughput.
What are the different components of a Cryptocurrency trading platform
- Trading engine – It matches the buy and sell orders accurately. Apart from processing transactions, it also computes the balance in each user’s wallet. Firms must invest heavily for getting a high-speed trading engine.
- User interface – While an attractive website appearance is needed, it should facilitate easy navigation. The user must be able to select the different options such as trading pairs, charts, order creation window easily. It should ultimately save time for a trader.
- Wallets – Apart from storing the coins or tokens of traders, it also ensures high transaction speed. Make sure that the wallet complies with the money-laundering guidelines laid down by the regulatory bodies. Team up with a reliable bank for accepting fiat currencies.
- Admin panel – It acts as the central management console for handling operations. It monitors the databases, controls the transactions, helps in setting up a new wallet, checks the progress made in different projects, and keeps track of the finances.
- Liquidity – Liquidity plays the key role to manage the increased trading activity and volume on the platform. Higher the liquidity, greater would be the turnover of the exchange and faster would be the execution of the orders. Since there are so many trading pairs available in a Bitcoin trading platform, there is a need to find market makers who are ready to accept any trade.
- Technical support – As queries and doubts will keep coming from users, it is critical to have a 24×7 technical support team. Swift response is needed to ensure higher user retention.
- Security – Since cryptocurrency exchanges involve huge competition among rivals, there would be attempts made to steal the data and funds of users through hacking and phishing. A Bitcoin trading platform must never compromise on its security. It must comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) guidelines laid down by regulatory bodies. Test all the elements of your exchange several times. Regular audits by third-parties can help in fixing vulnerabilities.
Once the website has been developed, indulge in solid advertising. Utilize both free and paid tools and spread the message across different channels. Techniques such as public relations, email promotion, social media marketing, and influencer marketing will work wonders. The ultimate aim is to increase the number of users on the platform.
There is an innumerable number of White label solutions available in the industry. They have both advantages and disadvantages.
They help clients by saving the time involved in the development process. It has also been tested many times before delivery. Hence, they are reliable and the output will be of a high standard.
White label solutions will not be favorable for firms that want flexibility as there are limited opportunities to change the design or functionality. A fixed amount will have to be paid to the solution provider regardless of the turnover of the exchange. Buyers may struggle to adapt to all the features of the software and would have to frequently contact the developer for help.
Follow all the above guidelines sincerely for developing your Cryptocurrency Trading platform and fulfilling your business objectives seamlessly. The huge costs and time incurred for developing a team to implement the different functions will be compensated by high returns and greater user engagement.