Whether we like it or not, cryptocurrencies are becoming an integral part of our lives. Now it’s difficult to meet a person who has never heard about Bitcoin. And, of course, many people are wondering how you can make money on digital coins.
The most obvious option is to start a cryptocurrency exchange, where users can buy cryptocurrency or swap it for another. It turns out that it’s simple enough. How to make a crypto exchange? Today we’ll find out!
How to Make a Crypto Exchange: Where to Begin?
So, how to open a crypto exchange? The main thing is to choose the right software. Depending on a supplier, it will cost tens of thousands of dollars. There are also ready-made SaaS solutions that allow you to launch an exchange in two weeks. They are cheaper, but in this case, the platform doesn’t belong to you, thus you don’t control it.
The providers of such solutions build exchanges on their servers, and then demand payment for each transaction, for any change. Such an exchange is more difficult to promote. Essentially, the owner has to compete with other exchanges that the provider has also build on its server. As a result, this is more expensive than developing a new solution.
A Few Words About Regulators
How to start a crypto exchange? What other important aspects it’s necessary to consider? Well, here are a few words about regulation.
In general, the attitude towards cryptocurrencies around the world is ambiguous. Somewhere they are treated better, somewhere they are prohibited, as in North Korea. Asian countries see cryptocurrencies as the future of money. In the US, attitudes towards cryptocurrencies vary by state. The US Securities and Exchange Commission doesn’t recognize tokens that were issued for an ICO (a process that combines an IPO and crowdfunding).
Often NY residents hide their IP addresses by impersonating an out-of-state citizen. This does not affect a crypto exchange — in this case, a user himself is breaking the law. To get Beatlicense, you need to ‘queue up’ for it for a long time. This will cost you a pretty penny, in fact, like any license to conduct operations with currencies.
Start a Cryptocurrency Exchange: How to Ensure Security?
How to start a crypto exchange? It’s necessary to note that security issues are crucial. Exchange owners must guarantee the safety of their users’ funds. All cryptocurrency exchanges are attacked by hackers. Bitcoin is easier to steal than dollars or euros, which can be tracked and returned.
There is no recipe for protection against hackers. The very first step is to configure the security architecture so that it’s difficult for an attacker to reach the assets. The level of reliability should correspond to the banking one. The security of a platform itself is ensured by the quality of a code.
The code should be written in such a way that even if it’s posted on Github, the security of a crypto exchange shouldn’t change from this.
How Are Exchanges Hacked?
How to make a crypto exchange secure? What are the main problems? Well, a person is the weakest link in any system. Even if an exchange is protected from a technical point of view, it can be hacked using a ‘human factor’. For example, one of the high-profile hacks of crypto exchanges was associated with the fact that keys to a multi-signature wallet were in the possession of one single person. By hacking the owner’s laptop, hackers were able to steal a pretty round sum.
There are no fully secure systems, there are always risks. At Defcon, pentesters can easily get usernames and passwords even from companies like Microsoft. And this factor also needs to be taken into account.
How to Open a Crypto Exchange: How to Promote an Exchange?
If the number of users on your new exchange is zero, you won’t make money on it. First, you need to announce its opening, inform users about what conditions you provide as well as what cryptocurrencies will be traded on it.
To start a cryptocurrency exchange successfully, you can also ask users to test your exchange services. First visitors will have a negative reaction anyway — new platforms often have bugs. The only bad thing is that disappointed users may not return. When you honestly ask people to help, they feel a sense of belonging.
New Tokens as a Way to Attract Users
Another easy way to promote an exchange is to add popular or new coins. In this case, the development will depend on how interested users are in them. One example of a rapidly growing cryptocurrency is Monero.
If you have a good development team that can add a new token in a few hours, this is an advantage over large exchanges — it’s simply not profitable for them. A successful crypto exchange usually supports approximately 90% of all existing crypto assets, tokens, and smart contracts.
How to open a crypto exchange? What other key necessary steps do you know? Feel free to share your knowledge in the comments!