Cryptocurrency exchanges are the soul of the cryptosphere that plays a vital role in the market volume growth. A cryptocurrency exchange software paves the way for potential investors to exchange their valuable Bitcoins or other cryptocurrencies and turn around huge profit returns! For this reason, and many others, every newcomer aspires to create his/her own cryptocurrency exchange to become a part of this revolutionary industry, and maximize profits for their venture.
But with the present drastically evolving crypto exchange market scenario, it might be overwhelming to figure out where to start or how to go about building the exchange to sustain, or shine through the wide-spread competitors. In this article, we are going to discuss the most essential steps that you need to take into careful consideration, to achieve a solid exchange for your business. So, let’s dive in.
Key steps to follow to start a cryptocurrency/ bitcoin exchange
Determining the operational location and obtaining license
Even though cryptocurrency exchanges are widely popular, they have still not been accepted to commence operations by a few countries. Therefore, it is important that you carefully analyze and determine the right location for your exchange to operate from, where it is legal and easily accessible. Also, you need to obtain the necessary license required before commencing the exchange according to your jurisdiction. The legal laws differ from one country to another, thus, consulting legal experts would help you build a strong base for your exchange.
KYC and AML Norms
It is also very important that you adhere to the KYC(Know Your Customer) and AML( Anti-Money Laundering) norms based on your location. KYC is a process which verifies the customers of your exchange through their IDs or passports, which will help avoid money laundering issues, and enable authenticated users, and transactions for your exchange platform.
Partnering with a bank/payment processor
To enable your customers to facilitate payments and exchange via fiat currencies, you need to conduct in depth research, and choose the right bank or a payment processor to partner with. By doing so, you can help your customers with instant settlements, and efficient withdrawal and deposit of fiat currencies which will eventually expand your user base.
Boosting liquidity
Liquidity is the key factor for any exchange that determines the convenience of users to quickly exchange their cryptos and make use of favorable conditions, and conversion of digital assets into cash. Customers will verify your order book before deciding to trade in your exchange. If your order book is full, it means enhanced liquidity for the exchange. Therefore, you need to make sure to amplify liquidity for your exchange to bring in more users. There are different ways of how you can boost your liquidity such as,
1) You can simulate artificial trading activities within your exchange between two artificial accounts which will increase the volume of liquidity.
2) You can connect your exchange with another existing exchange through API
3) You can connect with a whole network of exchanges whose liquidities are tied together, therefore improved liquidity for your exchange.
Solid technical and security features
You need to make sure to integrate cutting-edge features for your exchange to enable high-performance and long-lasting tendency. Here’s a quick list of the primary ones.
Technical features
Multi-currency and multi-language support
Powerful Matching Engine
Multi-currency wallet with multi-signatures
Advanced, user-friendly interface
Robust admin backend support
Liquidity API
Web, Mobile application support
Security features
Automated KYC/AML
Multi-Factor Authentication
Jail Login
Encrypted Data
DDoS, DoS protection
CSRF, SSRF protection
HTTP authentication
Constant maintenance and customer support
To drive customers towards your exchange, maintenance and customer support is absolutely necessary. You need to constantly check for bugs, and upgrade your exchange according to the changing trends and requirements. Also, you need to provide round the clock customer support, answer queries as quickly as possible, respond to KYC, and withdrawal / deposit requests to keep your customers intact.
These are the key attributes that will help build a sustainable bitcoin exchange for your business. But to undergo all of these steps and more, will require a lot of time, money, and involve enterprise level technical assistance.
The better alternative way is to acquire white label bitcoin exchange software. A white label software will be readily-available with every essential technical and security implementation to make the exchange fully-functional, and properly pre-tested ensuring no pitfalls. Also, they are more flexible, scalable and customizable enabling customers to launch the exchange in their own desired brand.
To avail yourself the best white label cryptocurrency exchange, and get up to speed and get ahead of your competitors, conduct extensive research and choose the right, experienced company!