This is going to be a massive article. Maybe it will take you a little extra effort to read all the way to the end. I’m sure you would already be aware of the term cryptocurrency, and exchange platforms. However, how well do you know how they function?
The article involves a lot of simple and little technical terms. It’s slightly difficult for people who want to know it effortlessly (if only you don't mind the length). It sounds very much like me. Does it seem like you too? Then this is exclusively for you.
I can assure you that except for the length it is not that difficult to read. Besides, you will learn a lot about cryptocurrencies and cryptocurrency exchange software development right from scratch. Well, let's get started!
The origin of cryptocurrencies
Not everything goes by the plans. Also, not all that's planned works out. Cryptocurrency has a story somewhat related to this. Yes. The anonymous inventor Satoshi Nakomoto only tried to create a decentralized cash system; not virtual currencies.
During that time, i.e. in the 90s, a lot of people tried to create a centralized cash system but all failed. All that Satoshi tried was only to create a differently functional decentralized cash system; he succeeded. Boom! Cryptocurrencies were born.
Basically, they are coins that are not physical. Neither you can touch or feel them nor you can pick them from the pocket and spend. A funny thing to relate to this is air. It exists; you know it exists by checking the balance.
Wanting to look at its structure will give you a big headache. It is a set of cryptographic codes that are comprised of numbers and letters.
You spend it from your wallet and get it back there when your friend sends it to you. But the wallets can be physical. The wallets are hard drives, papers with codes, pen drives, and sometimes even software that you can install on your laptop or PC.
Now, getting back to the cryptocurrencies, these are generated when tough cryptographic or math (just keeping it simple dude) problems are solved.
How to check double-spending in such a huge network?
When it comes to digital cash, everyone needs a payment system with accounts, networks, and transactions. There is one problem cropping up now. One individual spending the same amount twice. How do you prevent this in a decentralized system?
When the system is centralized, there will be one authority that says how much you have spent and what's remaining. How does that happen in a decentralized system?
The solution is simple. The whole network is taken care of by the nodes. Let's assume nodes as group watchers and verifiers. When a transaction is made, it is stored in blocks. These nodes take up the job of verifying and agreeing without dispute. During the verification, if there is a minor slip, then the whole thing goes in vain. All the nodes have to agree with the transaction unanimously for the transaction to be true.
So this what cryptocurrencies are, how they function, how they are verified, and most importantly how authentic each transaction is.
Now is the time for us to look into what cryptocurrency exchange software development is!
The cryptocurrency exchange software is nothing but a software platform. You get to exchange, buy, or sell your cryptocurrencies to another person across or within your borders. So, now that you know what it is, we must also know how it functions.
Let's pick something like the LocalBitcoin. This is an exchange platform that allows its users to buy, sell, exchange Bitcoins across different time zones and borders.
In this particular platform, the buyer posts his requirements, and at the same time, the seller posts what he is willing to sell or exchange. Now when the two requirements match, a trading bot executes the action.
As an added advantage, the cryptocurrency exchange software allows people to buy using their credit or debit cards too. Sometimes, even fiat currencies are also allowed.
How should your cryptocurrency exchange platform be?
I would like to list a few important attributes of cryptocurrency exchange software that you must never avoid. Having these features will keep you ahead of your competitors.
Give your audience a large selection of pairs to trade unless and until you are planning on something like LocalBitcoin, which allows only Bitcoin buying and selling.
The people who use your exchange platform might not always be relaxed enough to browse through all your features before finding the one that they want. They may actually bounce out of the platform in frustration. So, it is significant that you keep certain important features right in front of their eyes. Altogether, the user interface must be simple and easy.
Keep your withdrawal fee and transaction fee as low as possible. I don't mean you shouldn't have profits. All I want to remind you here is only that you should keep it nominal so that word of mouth increases and you will eventually have an increased customer base.
Deposit methods play an important role in determining the number of users for your cryptocurrency exchange software. If you have convenient deposit methods, then you can expect a wide range of users.
How do you earn from this?
When it comes to the earning matter, do not underestimate just because I have listed very few pointers. Read them and understand how lucrative of a business option this is. However, you should be cautious and consult crypto business experts before stepping into this venture.
A cryptocurrency exchange platform owner earns from the amount that people pay during transactions.
Also, from the interest generated as a result of the amount stored on the platform itself (Not everyone keeps all their cash in the wallets.)
From IEO, ICO, and STOs. Because every launch has to come to the exchange platform eventually.
Last words
I have shared the best of my knowledge that I have received about cryptocurrencies and cryptocurrency exchange platform development services so far. Now, it is your time to comment below if you have any uncleared doubts.