The cryptocurrency market is breaking records with every quarter passing by. The upcoming generation is already attracted to crypto. One of the significant reasons to invest in cryptocurrency is the desire for a reliable, long-term store of value. Also because, unlike fiat money, most cryptocurrencies have a limited supply, rounded off by mathematical algorithms. So, no political or government agency can degrade their value through inflation.
You may wonder what is good for you in Bitcoin exchange app development as an entrepreneur. Well, there’s a chance for you to be a BILLIONAIRE. Yes, that’s right. See, crypto-asset holders rose from 5 million in 2016 to around 101 million in Q3 2020 (by 190%). The count has already marked 300 million in 2021. Furthermore, according to the same research, crypto holders demographics are:
- 79% male, 21% female
- 58% are aged under 34
- 82% have a Bachelor’s degree or higher
- 36% have an annual income over US$100k
What else? Forbes reported a list of 12 billionaires crushing it through digital currencies worth $1trillion, quadruple from $250 billion in Jan 2020. Top-notch Bitcoin tycoon names with their net worth are as follows:
- Sam Bankman-Fried, the 29-year-old founder of FTX Exchange, is the wealthiest billionaire in the crypto market with a net worth of $8.7 billion.
- Brain Armstrong, CEO of the famous exchange Coinbase and his net worth is $6.5 billion.
- Changpeng Zhao, founder, and CEO of Binance, has a net worth of $1.9 billion.
So, developing a Bitcoin exchange app sounds like a plan for making billions of dollars now?
It’s a next-gen business thing. The more people are aware of crypto, the more they buy, store, and exchange their digital coins. And to do so, they are highly in need of reliable crypto trading platforms with good exchange offers.
Well, if you think you can do it, then you can. However, to avoid any adversity during your bitcoin exchange app development, it’s better to grasp it from a developer perspective, too.
Understand How a Bitcoin Exchange App Works?
A Bitcoin exchange app is an intermediary between sellers and buyers. It acts as a brokerage, allowing users to deposit money from a bank or other means of deposit. If a user wants to trade between cryptocurrencies, the exchange app charges a currency conversion fee. Let’s try to understand the Bitcoin Exchange app working model with basic steps to complete a transaction on a bitcoin exchange.
- For any crypto trade on an exchange platform, a user must register and go through a set of verification steps to authenticate their identity.
- After the successful user authentication, the user gets an account to deposit their money before buying digital coins.
- Different bitcoin exchange software contains other user deposit methods, including direct bank transfers, bank wires, debit or credit cards, PayPal, etc. Using the same options, traders can withdraw money from their crypto exchange accounts.
- Bitcoin or any crypto exchange platforms match buyers and sellers, also known as takers and makers (in cryptocurrency language). The platform works similarly to a traditional stock exchange. Traders choose to buy and sell bitcoin by inserting either a market order (buy/sell immediately, regardless of price) or a limit order (buy/sell at a specific price or better).
- All bitcoin exchange apps charge transaction and funds transfer fees. The fee applied to each buy or sell order depends on the trading volume. In addition, the platform may charge currency conversion fees based on currencies accepted by the platform.
For example, your bitcoin exchange only deals in U.S dollars, and a user transfers Canadian dollars. So, you can charge a fee to convert the CAD to USD. {Tip: supporting local currencies is a magnetic factor for the traders in your targeted area.}
Now that you know Bitcoin Exchange’s working flow, understanding its development would be much easier. So, without further ado, let us move on to the main part of the post.
How To Start Your Bitcoin Exchange App?
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Target a country or region
Developing a cryptocurrency trading platform requires compliance with all Government security measures and regulations of the country it will operate in. You might need to obtain necessary licensing and approvals to make your exchange platform more reliable. However, it is your call to decide whether you want to operate globally or confine your bitcoin operations to a region.
If you ask an intelligent entrepreneur, their advice would be, “start the platform within the area you already know the Government policies regarding crypto exchange.” In contrast, globally scaling is as lucrative as risky. You need to adhere to financial regulations within each jurisdiction. Moreover, your exchange will have to support various fiat currencies, plus payment processors to accept payments.
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Review the regulatory requirements of that region
In Dec 2019, a Bitcoin exchange BitMEX had to face a $300 million lawsuit against operating an unregistered cryptocurrency platform in the U.S and not complying with KYC/AML laws. The exchange also lost the reputation of being the top crypto exchange.
If you don’t want your exchange to get hit by any law after blooming in the market, understand the regulations. Know Your Customer and Anti-Money Laundering laws prevent any civil or criminal charges. So ensure you identify each trader through government-issued IDs.
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Partner with developers specialized in Crypto exchange
Unless you want to acquire an off-shelf, white-label bitcoin exchange software, you need blockchain development geeks. You can either hire mobile app developers or outsource your exchange development from a mobile app development company.
As cliche as it sounds but your bitcoin exchange platform indeed has to be user-friendly and intuitive. You want to offer a solution that makes it easy as a cakewalk to trade in cryptocurrencies for traders. Therefore, you need a team of practiced developers for your Bitcoin exchange development.
Master how to select the app development company for a startup.
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Focus on pulling off the maximum security in your cryptocurrency exchange app
Securing funds of makers and takers as well as their private data is a prime for a bitcoin exchange. The fear of losing money is the leading cause many people drift away from trading on local Bitcoin exchanges. However, using blockchain technology and adhering to top-level security, you can secure each transaction occurring on your exchange. Thereby, you gain the trust of your audience and motivate them to trade securely against any cyber attack.
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Create the best cryptocurrency trade architecture
We can divide the bitcoin exchange software architecture into four components as follows:
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Trade engine
The trade engine is the crux of any exchange platform. From order booking, matching buyers/sellers, executing transactions to calculating balances, everything is accessible through the trade engine. You cannot operate your exchanges without it. So ensure you have a robust trade engine in place before setting up other things.
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User Interface
As said earlier, create an exchange that makes crypto trading super easy for beginners to pro traders. In that case, the User Interface has the central role to play. The UI is how your users see your exchange (whether it’s a website or mobile app). Since trading through smartphones is increasing, it has to be mobile-friendly. A mobile bitcoin exchange app for iOS and Android can get the job done very well.
To achieve a good UI design, developers advise following wireframing and prototyping techniques. Noteworthy, your exchange UI must enable traders to:
- Register and access an account
- Deposit, save and withdraw Crypto and Fiat currencies
- View current order book, transaction history, balances, statistics, etc.
- Analyze daily crypto market cap
- Place buy and sell orders
- Access the customer support
Catch more details on Cryptocurrency Wallet App Development.
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Crypto wallet
To facilitate makers and takers store and manage their bitcoins securely, an exchange needs to build a bitcoin wallet. For example, during a transaction, the cryptocurrency transfers directly from a trader’s crypto wallet to a wallet accessible by the other trader only on exchange apps like Coinbase. And the exchange platform charges a fee for transitioning the digital coins securely.
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Admin panel
An Admin Panel is similar to business intelligence and management software for your crypto exchange. It assists you in controlling and managing the entire exchange platform. Thus, you cannot miss out on creating an analytical Admin panel. Some of its functions include:
- Altering liquidity
- Updating the spread and trading fees
- Authenticate user accounts for trading after verifying KYC and other compliance requirements
- Managing currencies like BTC, USD, ETH, etc., and markets like BTC/ETH, USD/BTC, etc.
- Crediting fiat deposits or debiting fiat withdrawals as requested by users
- Charging the fees on transactions
- Provide the support requested by users
Lastly, the cost to develop a bitcoin exchange application
The bitcoin exchange app development cost is a variable factor. It varies depending on some of your requirements, choices, and development rate. For example, the below requirements or preferences may affect your budget.
- The business model for bitcoin exchange app (centralized, decentralized, or peer-to-peer),
- The number of features to build in the exchange software,
- Technology stack to develop secured exchange
- Platforms to deploy the exchange: Android, iOS, or Web
- Third-party APIs to integrate into the platform
Now, the team you need to create a crypto exchange application includes:
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- Backend & iOS/Android developers
- Frontend developers
- Graphic Designer
- Quality Analysis
- Project Manager to create and manage project milestones
It’s a Wrap
Hoping you are now good to go to ignite your bitcoin exchange app development, let us bid adieu. We are a promising on-demand app development company. You can reach out to us for assistance in crypto exchange or any type of app development.