Creating or developing your own Bitcoin exchange is somehow a big task to handle. The one who wants to start a new own Bitcoin exchange they have to follow some regularities and formalities to complete their Exchange website. To develop an Exchange platform we have to seek permissions and getting linked to banks etc. not only this. There will be a lengthy process to be completed to establish a Bitcoin Exchange.
Basically, some tips must be done before creating an own Exchange platform. By this article, I will share the requirements that are needed for the establishment of new Bitcoin exchange platform.
The locality of Exchange:
First of all, we have to decide whether the exchange should be operated globally or local or in a region. Exchange platforms are different types some are will be operated in local but some may work globally. So, we have to ensure the locality of the exchange. After deciding we have to seek legal authorities to the exchange because from place to place legal actions will be different. So we have to take legal permissions from all the places where we are going to introduce our exchange platform.
Legal authority to Exchange:
For money exchange platforms it is must and should to have legal entities to the exchange like KYC. KYC means (Know Your Customer) it is a process to identify the person through ID cards issued by the respective Government of that country. So it is better to have the best customer verification process to your exchange platform according to respective country’s legal proceedings. By having proper verification to your exchange makes you far away to illegal actions or threats.
Linked to Bank or Payment Processors:
The next big step is getting attached to bank or payment processors for the transactions of amount through Paypal or different payment modes in your exchange. We have to follow some tips for choosing the bank for the exchange. It is better to choose a bank with online facilities and with a good implementation of fastest technology to the bank. Because some banks took two to three days for transactions it is better to avoid this type of banks. By attaching to this type of banks may proceed late payments.
For Exchange platforms, it is better to link with the bank which will have high liquidity, online services, and fast transactions. Because transactions in exchange platforms must be done within a few minutes and number of people will exchange their money for this reason bank must have the high liquidity to supply. So it is better to link a bank with high liquidity and lightening transactions to your exchange platform.
Liquidity of Exchange:
Liquidity of the exchange plays a vital role in the success of the exchange platform. Every investor will think before investing in an exchange and they will look up into order book and trading activity. For a new exchange platform, liquidity makes a huge problem and that problem can be triggered by simple beginning tips.
By the technique of buying and selling orders between the accounts in the own Bitcoin exchange platform.
By implementing API interface which connects your Bitcoin exchange to other existing exchanges.
By joining in networks of cryptocurrency exchanges which bond all the liquidity of the exchanges in its network. If we join in the network there will be no problem in liquidity.
These are the tips to be followed in order to, get liquidity to the Exchange platform.
The best security system must be applied to the exchange platform. The security system enables to protect both transaction and data details of both traders and owners of the respective exchange platform. It will protect the transaction details of the customers not to threat by others and data security of both traders and owners like bank details of the customer.
For the best exchange platform, it must and should to adopt the best security system for the protection of data and transaction details. Security of the exchange is most important to be aware of threats.
Customer support also plays a vital role in the success of the exchange. By enabling a good customer support to the exchange makes people feel comfortable to communicate with the team for their queries. By answering to customer complaints such as withdrawal and deposit of money etc and getting fixed them within time makes exchange popular.
Many surveys suggest that exchange with good customer support team profits more and well popular. So hiring the best customer support team with good patience level is better.
These are the basic tips for the establishment of the Bitcoin exchange platform. But the software of the exchange platform is most important for the working of the exchange all over the world.
Designing of Bitcoin Exchange Software:
Basically, the software of exchange consists of four components which make software to work. They are 1. Trade engines 2. User Interface 3. Wallet 4. Admin Panel these are the basic components of the exchange platform. Each component works on different areas to run the software of the exchange.
1. Trade engine is the first basic component and it is a core of the exchange. It works on transactions, calculating balances, order book of the exchange. It is impossible to run an exchange without trade engine so it is must and sure for the functioning of the exchange.
2. The second component is User Interface it makes traders view the website of the exchange. The user interface must be friendly and initiative which makes customers feel comfort and the user interface must be mobile friendly also. Because mobiles are using rapidly so it is better to maintain mobile-friendly user interface.
3. The Wallet is the third component and it carries altcoins of the exchange. Bitcoin splits coins and stores into two wallets and they are the cold and hot wallet. We can transfer coins through hot wallet to other without any permission. But cold wallet holds coins in offline no one can trace this coins and no one can steal coins. This type of wallets is the best for the exchange platform.
4. Admin panel is the fourth component and it will be maintained and controlled by the operator of the Exchange. Through admin panel, an operator can alter the liquidity of the exchange, setting trading fees, verifying KYC etc. can be controlled. All changes and specifications that are affixed to exchange will be drawn from this panel.
These are the four basic components for the manufacturing of own Bitcoin software exchange. But it is difficult to manufacture a new exchange software for the Bitcoin and it takes years. Sometimes we may lose grip in the security system and transactions etc. of the exchange so for all these reasons there was an alternative option is using free and open source scripts for your own Bitcoin exchange.
Open and Free Scripts:
If we surf on different forums like Github etc. we can find free open source Bitcoin exchange scripts. The main benefit of this exchange scripts is source code. It is totally free but there are some minor risks we have to face with this type of free source codes. Here given the risks that we have to face with this free exchange scripts.
For this free scripts, we have to do some modifications and customization of the script. We need to hire someone who has the technical knowledge to insert some line of codes in the open-source script. For all this process we have to spend some more money and it takes a lot of time.
This type of scripts are not secured and not reliable. There will be more chances to hack your exchange system and the money or coins are also can be lost easily. The main defect of this scripts is they can easily hack able.
Support of the open source system is worse. If you get any interruption they do not try to fix your problems in time and they will never respond in time. Mostly support from them is less and developments are also fewer.
These are all the pros and cons of free and open Bitcoin exchange scripts. If the operator of the exchange can able to manage this risks they can use this free scripts easily. But there will chance of the threat to your exchange. To overcome all these problems another software is available in the market is known White Label Exchange software.
White Label Exchange Software:
White Label exchange software is the most trusted software for the Bitcoin exchange. It is already tested and ready to use for the exchange there are many advantages with this software. The software can be customized and altered as we require per our requirements. The main advantage of this software is we can save our required technical implements for our exchange. The core components like trade engine, wallet, UI, and admin panel is already designed and tested. And the only remaining thing is customizing the software as we require. But this software is not free it can be purchased and disadvantages or risks are very less when compared to free scripts.
The above-mentioned tips and factors that should be followed in developing new Bitcoin exchange platform. By observing and following this steps we can be built a strong exchange platform.