Have you heard the story of The Mysterious Mr. Smith? Sounds like a character from an Agatha Christie novel, but he’s not. This gentleman, who prefers remaining incognito, was a software engineer in Silicon Valley in 2008 until a casual conversation transformed his life. A friend mentioned the immense potential of Bitcoin, an innovative payment network. His curiosity tickled, Mr. Smith researched Bitcoin, invested $3000, and forgot about it until good fortune knocked on his door in 2013. Bitcoin’s price soared, making Mr. Smith a celebrated millionaire. Reams are being written on cryptocurrency Bitcoin and the blockchain boom, the way it’s creating millionaires. Are the two interrelated? For the unversed, Bitcoin is digital is a decentralized digital currency, essentially an electronic payment system without third-party intervention. Blockchain, as the name suggests, is a chain of records stored in the form of blocks that can’t be altered. It’s like an incredibly secure computer file that stores data. A revolutionary technology that powers Bitcoin by facilitating digital transactions. That said, blockchain’s scope is vast. If Bitcoin transfers currency, blockchain transfers all kinds of information, including property ownership rights. Through blockchain, users can trace their records all the way back to the source. Blockchain-based cryptocurrency mining, of which Bitcoin is a shining example, and investments are hogging the limelight with their meteoric rise. A rarely noticed fact is that creating products for the crypto ecosystem has made many millions too similar to Mr. Smith. While the world is engaged in buying on dips and selling at peaks of the top-rated cryptocurrencies like Bitcoin, Ethereum, Dogecoin, etc., someone is making money every time a deal is transacted. They are the crypto trading platforms. To put things into perspective, Binance, the largest centralized exchange, transacts a volume of approximately 15 billion dollars in 24 hours. The launch of cryptocurrencies in tandem, with additional services like decentralized file storage offered by Arweave, is making the Web3 space all the more exciting. It might sound fancy to hear someone say, “I’m gonna start a Bitcoin exchange” but it isn’t as difficult as it might seem. So, how does a crypto exchange startup build a crypto trading platform or you may be thinking about how to build a cryptocurrency exchange app? There are two paths to choose from, either you build a cryptocurrency exchange from scratch or use the services of a cryptocurrency exchange software solution provider. • The features you expect could be: • Easy to navigate User Interface and Use Experience (UI/UX) • IEO (Initial Exchange Offering) launchpad • Crypto wallet • Instantaneous trading • Stop limit and stop-loss orders • Live trading charts • Margin trading API • Futures 125x trading • Limit maker orders • Staking and lending support • Escrow services and • Multi-cryptocurrencies Support Good-to-have features to start your own crypto exchange could be: • Referral options • Admin panel • Perpetual swaps • Multi-language support • The most vital aspect of the platform would be the security features which should include, but may not be limited to: • HTTPs, two-factor and biometric authentication • Jail login • Data encryption • SQL injection prevention • Anti-Denial of Service (DoS) • Anti-Distributed Denial of Service • CSRF (Cross-Site Request Forgery) and • SSRF (Server Side Request Forgery) protection Cryptocurrency Exchange Platform Development The first option, that the cryptocurrency exchange platform development, can be very involved and would imply high crypto exchange development cost and time. It would also entail taking on technical issues like wallet integration, bank partnering, etc. That is if you find good crypto exchange developers or if you yourself are one. Enough emphasis cannot be put on the criticality of QA testing and beta testing in this mode. There is also the all-important issue of security risk. White Label The second option, the easier and usually chosen one, is to use white label solutions – a product or service made by one company but sold by another – by cryptocurrency exchange software solution providers. Most of them help their clients build a cryptocurrency exchange platform and/or app based on their business needs. Usually at a price point of $10K or below. This is definitely the more cost-effective way to make a secure crypto trading app or exchange. Most white-label solution providers offer fairly secure and largely bug-free platform implementations. Almost all of them come with a plethora of advanced features, which would be insanely cumbersome (and expensive) to develop from scratch. Best part of it is, if all the paperwork is lined up, the white label platform implementation could be launched in less than a week and you could be testing your platform in the beta-test module (the final test of a software solution before a product goes live). Compliance The other important aspect you need to keep in mind, irrespective of the path you choose, is legal compliance. In the United States, cryptocurrency exchanges must comply with the SEC and CFTC rules and regulations, among others. They need to procure a license to operate as a Money Transmitter business. Know Your Customer (KYC) regulations also need to be followed as required by law to combat money laundering since crypto trading platforms are considered to be a currency exchanges. As is obvious, it is imperative to seek legal counsel by consulting an attorney familiar with the regulations of the industry as they vary by jurisdiction. Setting up the Crypto business Now that we have all the information, how do we go about it? First of all, seek legal counsel and get the licensing requirements squared away. If you are planning on going the white-label route, the next step would be to identify a good cryptocurrency exchange software solution provider that meets your needs. Or option two: put together a team of developers, pen down a feature list, draw up a process flow and start coding. When you have your platform fashioned as you like it, you need to start moving towards making it come to life. This would be the stage where a payment processor would need to be engaged. The next step would be to create additional liquidity by connecting your exchange with others. Before getting started with beta testing, this is the time to implement best security practices and review them over and over again. At the risk of being repetitive, check, recheck and then check again. This is the most important step in the entire exercise. Once satisfied with how the trading platform works, it is time to start calling family and friends. Announce the arrival of the world’s best cryptocurrency trading platform on social media and kick off the marketing campaign. Has the idea of owning the best crypto trading platform made you all excited? Do you want to make a crypto trading app and promote the same on a website? Our team of experienced web developers brings in finesse and experience to do the job efficiently. Don’t hesitate to call us on +1.408.621.8481 or drop in a line at team@sdi.la.