Categories: Crypto Currencies

How To Start a Cryptocurrency Exchange

Creating your own cryptocurrency exchange service is a very profitable, but at the same time- time consuming process that requires certain knowledge and capital investments.

Basic principles of cryptocurrency exchange

All transactions related to cryptocurrency, by definition, must be carried out on the Internet. Cryptocurrency exchange platform performs functions similar to bank exchangers:

Buying and selling. The virtual currency is exchanged for various national currencies. The most common fiat currencies are used – dollars, euros or rubles.

Exchange. This operation is carried out based on the cryptocurrencies denominated in the exchanger.

Transfer. The function of transferring to an electronic wallet is performed by services, such as Webmoney, Kiwi and others.

All services discussed above are paid. The commission charged (2-10%) is the revenue side of the exchanger’s budget

How to get the script for the exchange

There are three absolutely legal ways, and each has its own advantages and disadvantages:

  • The first way is to download it for free on the Internet. However, such programs are too simple and can contain internal errors, both in the asset exchange system and in the security system.
  • The second way is to buy or rent on individual terms. The cost of this option is several thousand dollars.
  • Create your own script from professional programmers. This option is the most preferable, since you can get a platform with individual characteristics. Disadvantages – high cost and long development time

Legal side of business

For the legal operation of a cryptocurrency exchanger, legal business registration is required. There are currently several ways:

  • Perpetual loan agreements. The main way of work of exchangers, does not require notarization.
  • Registration of entrepreneurship in the field of information technology. But at the moment, is limited by the lack of regulatory legislation.
  • Buy a Japanese license. The high cost is more suitable for creating exchanges. The license price is about $ 100 thousand.

How to attract customers

High competition leads to lower fees. The client is looking for exchangers with the most profitable rate. Therefore, constant monitoring of the market is necessary to supply the most favorable terms of exchange.

Providing the widest possible range of services – exchange from cards of any bank, using various payment systems and accepting cash. It is also useful to expand the number of cryptocurrencies available for exchange.

The cryptocurrency exchanger must work around the clock, and the exchange process itself is completely automated for real-time operations.

Online exchange rate calculator

On the main page of any exchanger, you need to install a special form of the calculator. It will help users instantly calculate how much cryptocurrency / fiat money they will receive after exchanging

The following factors should also be taken into account:

  • Simple and intuitive interface.
  • Bonus and accumulative programs.
  • Availability of funds for instant exchange.
  • High-quality and efficient technical support.

Organization of the cryptocurrency exchange system

Several elements have to be included at your exchange platform in order to function efficiently:

User interface. First think who is your clients of your exchange and customize your platform it for your target needs . Clients who is proficient in crypto exchange will require chart analysis and preview of recent and current orders. But the ones who is new to crypto exchange will look for simple and intuitive interface.

Matching engine. At the heart of every exchange is responsible for calculation balances and settling purchase and sale transactions, creation an order book.  Since the matching mechanism is closely related to the transactions being performed, any error can potentially have a large impact on the correctness of the transaction across the entire exchange, so be sure to find reliable and proven technology.

Admin panel. The place where all the tools needed to manage the exchange.

Wallet. Deposits and withdrawals in cryptocurrencies are supported.

How much can you earn with a cryptocurrency exchange office?

Let’s take not the largest commission value of 2%. If every day exchanges are made on average for a total of $ 5,000, the commission of the exchange office will be $ 100 per day, and about $ 3,000 per month.

It is clear that in order to achieve such a flow of customers, it is necessary to advertise the exchanger on the Internet and include it in the listing on monitoring sites of exchangers. The most important factor for success will be the flawless operation of the exchange office, taking into account important consumer properties. However, advertising is also important so that new clients, aggregators of exchange offices and bloggers who write about cryptocurrencies know about the exchange office.

However, given the huge worldwide interest in the cryptocurrency market, the result may be worth the effort.

Olivia Chloe

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