Have you recently heard about cryptocurrencies? Well, the world is moving towards this digital currency, with many businesses banking on cryptocurrency exchange applications. Let us know all about this in the article below.
The modern economy has seen multiple changes in the current decade. Out of all the prominent changes, the introduction of cryptocurrencies has revolutionized the economy. Do you know that the first cryptocurrency was introduced in 2008? Since then, these digital currencies have established their separate fan base and worth in the economy.
Multiple businesses are observing these trends and don’t shy from earning benefits from a cryptocurrency exchange. The top two options include to earn from these digital currencies are:
- Introduce a new cryptocurrency with specific financial features
- Introduce a new cryptocurrency exchange platform
With more than 20,000 different cryptocurrencies in the market, many businesses prefer to go for the second option. Let us discuss all the cryptocurrency exchange platforms starting with their quick definition.
What Is a Cryptocurrency Exchange Platform?
The cryptocurrency exchange platform is dedicated to trading one cryptocurrency with others. Hence, users can easily store, buy, or sell different cryptocurrencies using the cryptocurrency exchange platform.
Do you know that there were around 419 cryptocurrency exchange platforms with an around-the-clock trading volume of 112 billion globally?
Users prefer to use cryptocurrency exchange platforms as these are friendly ways to earn profits in cryptocurrencies. These platforms add a layer of security and reliability for safe cryptocurrency trading. It is easy for the users to go through the simple process of the cryptocurrency exchange platforms. Let us know about their work in the upcoming part of the article.
How Do Crypto-Exchange Platforms Work?
Users usually wonder about the working of the dedicated cryptocurrency exchanges. These are the platforms where buyers and sellers come together. The quick steps for easy understanding of the cryptocurrency exchange are:
- Pick a crypto-exchange platform and create your account: With several options in the cryptocurrency exchanges, it is easy for businesses to pick one based on their needs. The next part is to complete the registration on the exchange and start using it for trading different cryptocurrencies.
- Adding funds to your account: The next step is to add funds to the cryptocurrency account. You can pour the funds from your bank accounts into the cryptocurrency exchange account.
- Buying cryptocurrencies: After having funds in your account, it is easy to start buying different cryptocurrencies. It is essential to research the top performing cryptocurrencies to buy the one fetching the highest monetary profits.
- Keeping funds in the crypto-exchange platform: The next step is to keep the funds in the platform’s account. It is essential to buy more cryptocurrencies as and when needed.
- Moving the cryptocurrencies to the wallet: The purchased cryptocurrencies can be quickly added to the user’s wallet to enable trading.
- Start trading: Last but not least is the main process to start trading different cryptocurrencies. It is easy for the users to trade cryptocurrency with cryptocurrency or trade cryptocurrency with Fiat.
After going through the detailed work of the cryptocurrency exchange platform, let us understand the different types of these platforms.
Types of Crypto Exchange Platform
Not two crypto exchange platforms are the same. Hence, it is important to realize the different crypto exchange platforms and select one based on the specific features or your trading needs. These are:
1. Centralized Crypto Exchange Platform
It is one of the common crypto exchange platforms. It allows quick selling and buying of the different crypto assets. A third-party operator enables all the security of the buyer’s assets, seller’s assets, and transaction monitoring. The centralized crypto exchange platform or CEX isn’t on blockchain, but IOU-based systems are used.
2. Decentralized Crypto Exchange Platform
There is no third-party involvement in the decentralized crypto exchange platforms or DEX. Al the user funds are stored in the blockchain in the decentralized crypto exchange platforms. This platform uses assets, proxy tokens, escrow systems, etc., for peer-to-peer trading.
3. Peer To Peer (P2 P) Crypto Exchange Platform
It removes the need for third-party involvement, and all the users can participate directly in the peer-to-peer crypto exchange platform. Hence, all the transactions are accessible and easy with no involvement of middlemen. The peer-to-peer crypto exchange platform improves the speed and security of digital transactions.
4. Instant Crypto Exchange Platform
Users looking to exchange one cryptocurrency for the other instantly can go for the instant crypto exchange platforms. These platforms offer access to the different trading pairs based on one central service. It is easy to use these platforms as all you need to do is register the trade order, and it will get instantly executed.
Key Cryptocurrency Exchange Features
After having a quick look at the different types of cryptocurrency exchange platforms, it is important to understand the main features essential for any successful platform. These features improve the cryptocurrency exchange platform’s functionality and users’ trading experience. While it is easy for the platform to add several essential features, it is recommended to go through the key features, which include:
1. Admin Panel
When it comes to managing the different operations of the cryptocurrency exchange platform, the first thing that comes to mind is the dedicated admin panel. The admin console handles all the operational aspects of any crypto trading app. Further, any exchange can customize its admin panel with different functionalities. Not to miss features include editing trading fees, credit or debit funds, addressing support-related issues, managing cryptocurrency listings, adding new currencies, etc.
2. User Authorization and Verification
It is important for any cryptocurrency exchange platform to facilitate the user onboarding experience. It can be started by allowing the users to fill know your customer’s forms which can fasten the user authorization process. Further, it is essential to include a user verification process as without the same, the fraud transactions may increase, and transaction transparency is hampered. Hence, many cryptocurrency exchange platforms go for anti-bot verification, two-factor authentication, data encryption features, etc.
3. Simple User Interface or User Panel
It is the key face of any cryptocurrency exchange platform. Hence, it is important to make the user interface highly user-friendly, simple, and clear. It facilitates trading efficiency, ensures that trades are placed effectively, and reduces the trading time. Further, the simple user interface must offer detailed statistics, funds withdrawals, funds deposits, order management, etc.
4. Trading Engine
The cryptocurrency exchange platform can’t work without a dedicated trading engine. It can be effectively referred to as the heart of the platform. Any trading engine tracks the bids, opens orders, generates new trades, finds new trades, etc. Thus, any cryptocurrency exchange platform must go for a trading engine which handles order-books access, balances calculations, match the selling or buying transactions on the platform, performs crypto transactions execution, etc.
5. Crypto Wallet
It is a necessary feature for any cryptocurrency exchange platform as it allows the storing, sending, and receiving of different cryptocurrencies. The platforms have the opportunity to create hot wallets or cold wallets. The hot crypto wallets are available online, quick in operation, and easy to use. The cold crypto wallets, on the other hand, are secure and offline wallets. The hot crypto wallets may attract security threats, while the cold wallets are not convenient for use. Hence, the cryptocurrency exchange platforms can make their choice according to their needs and make it highly functional by integrating it with different cryptocurrencies.
Any cryptocurrency exchange is incomplete without a dedicated analytics tool. It allows the traders to make real-time and data-backed decisions to leverage different trading opportunities and maximize their crypto profits. Some of the key functionalities for any crypto exchange analytics are live information tracking, graphical trading experience, stochastic RSI for identifying overbought or oversold zones, etc. These include Moving Average Convergence Divergence to predict future price fluctuations, Moving Average for finding the average price over a specific period, etc. Not to miss is the Relative Strength Index which highlights the trend change options, trend strength, etc.
7. Intuitive User Interface
Any cryptocurrency exchange platform will be used by beginners and professionals. Hence, it is imperative to have a highly intuitive user interface. The user interface must hide the possible complexities of cryptocurrency trading and offers immense support to beginners. It can have a dedicated dashboard with quick view access to different trading features, unlimited funds deposits or withdrawals, etc. Further, it is crucial for any cryptocurrency exchange platform to reduce the trading time, ensure that all transactions are efficiently executed, etc.
8. Push Notifications
When it comes to creating seamless communication with cryptocurrency exchange platform users, push notifications have established their worth. It is easy for the exchanges to alert and notify the users about crypto news, latest trends, price changes, crypto coin exchange listings, special offers, etc. Further, the users can anytime select their preferences for different push notifications based on their needs or interests.
9. Transaction history and order book
It is crucial for any cryptocurrency exchange platform to enable transaction history, which allows the users to track their different transactions over a period of time. It allows details about trade rate, operations time, other transaction information, etc., for all the completed trades. The order book is essential as it offers a list of the open orders for quick navigation to the current bids.
10. Customer Service
It is essential for any cryptocurrency exchange platform to offer around-the-clock customer support to different users. Many users are beginners, and hence it becomes important for them to have dedicated assistance. It increases the adaptability of the platform as users don’t have to run through a long list of FAQs to get their query resolved, especially when it is about credit or debit.
11. Range of Currencies
While it is impossible for any cryptocurrency exchange platform to offer multiple ranges of currencies, it may introduce anything between 50-150 cryptocurrencies. Hence, it is one of the crucial features for any cryptocurrency exchange platform to offer a range of currencies based on its user audience.
It is important for the cryptocurrency exchange to offer detailed research to the users. Many digital platforms offer dedicated learning materials, online tutorials, and other tools for ensuring that users can learn about cryptocurrencies while earning using the same. Many cryptocurrency exchange platforms encourage users to do research and offer rewards for the same.
13. Interest Earning
Many cryptocurrency exchange platforms offer interest on the different cryptocurrencies. Hence, it becomes crucial for the users to understand the interest-earning policy of these platforms. Some cryptocurrency exchanges prefer to pay a striking fee to the users committing their coins for a set period, while others may loan out the user money.
Not all cryptocurrency exchange platforms can operate in different locations. Hence, it is crucial to understand the allowed operation of any specific cryptocurrency exchange platform in your country or state.
Any cryptocurrency exchange platform may use different APIs for multiple functionalities. Hence, it is crucial to understand the FIX protocols, web sockets, and types of APIs. It is crucial for any cryptocurrency exchange to have a FIX protocol for integrating different platforms together. The use of FIX protocol is essential irrespective of the cryptocurrency type. The web sockets help different cryptocurrency exchange platforms to allow information exchange related to the market movements and trading changes. Hence, the use of a polling server for reply is eliminated as web sockets facilitate event-based responses.
Further,the cryptocurrency exchanges can go for public APIs or private APIs based on their needs. The public APIs contain the instructions followed for data access and services which are shared outside the organization. It works in the public domain. The private APIs, also called internal APIs, offers an open architecture to the development team. Hence, using the private APIs, the cryptocurrency exchanges can plug in software, backend system, and other data.
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What Do Users Look for In a Crypto Exchange?
After looking at the key cryptocurrency exchange features, are you planning to create one for your business profits? Just like there is no single crypto exchange platform that is fit for all users, it is crucial to understand the key needs of any users. Some of the top features which users look for in any crypto exchange include:
It is important to understand that any central institution like fiat does not protect cryptocurrencies. Even FDIC insurances don’t apply to cryptocurrencies. Hence, crypto exchange platforms offer dedicated insurance or rely on high-tech security measures. The cryptocurrency exchanges offering insurance protect the account holders if a specific amount of money is stolen, while the ones relying on technology observe strict security practices to protect the account holders’ data and money.
Most crypto exchanges switch to the combination of offline storage and active cryptocurrencies. Some prefer two-factor authentication or insurance policies for safeguarding account holders. Not to miss is that users prefer to go for a crypto exchange having the least security issues.
Cryptocurrencies attract national and state-level regulations. Hence, not all users from all locations may be allowed to do cryptocurrency trading. Hence, the users need to understand their accessibility to the cryptocurrency exchange platforms. A country like China has banned cryptocurrency trading, while the US allows it under stringent conditions.
All this related information should be published on the cryptocurrency exchange platform and other information like acceptable currencies. Further, some regions allow licensed exchanges to allow cryptocurrency trading while others have relaxed rules.
Some cryptocurrency exchange platforms have a higher fee structure than their counterparts. These works on the strategy that the trader’s high profits ensure that they have to pay extra money to the exchange as fees. The increased fees seem worthwhile to the traders as they benefit from improved protection and insurance.
The leading cryptocurrency exchange platforms may charge fixed fees from the traders or go for the percentage of the trade. Some charge fees based on the transactions and keeps it different for buyers and sellers, while others charge fees based on the currencies. Hence, users can go for the platform based on suitability after understanding all these fee aspects.
No user wants to go for the cryptocurrency exchange platform having disturbed liquidity. The platform must have enough trading volume whenever a user wants to sell, buy, or trade cryptocurrencies. Further, the digital currency platforms with a high trading volume offer large profits based on the continuous buying and selling of digital assets. Thus, while searching for the ideal cryptocurrency exchange platform, the users must go for one having the highest trading volume, which safeguards the liquidity.
e. Coins offered
The next line is the availability of the different digital coins on the cryptocurrency exchange platform. With large amounts of cryptocurrencies available in the market, businesses can’t introduce all of them on their platform. The only solution for the same is to go for the top-performing or in-demand cryptocurrencies for your cryptocurrency exchange platform. The users may find the required coins like Bitcoins, Altcoins, etc., and select the exchange accordingly. The newer coins have high risks, while the established ones have a lower risk of losing or hacking.
f. Educational tools
Not all users are cryptocurrency trading experts; hence, many look for dedicated education tools. Hence, the cryptocurrency exchange platforms must offer a detailed understanding of the different digital assets, coins, blockchain technology, the process of crypto trading, etc. Many cryptocurrency exchange platforms offer rewards to the users participating in their new coins learning program. These methods work best for the platforms to introduce new cryptocurrencies while rewarding the users for the same.
It is easy for the users to earn a small part of cryptocurrency, which can be converted for money or traded. The detailed courses and articles on the cryptocurrencies websites help beginners learn about the latest innovations, crypto markets, crypto history, etc.
It is one of the key points in cryptocurrencies. It is easy to hold or keep the crypto keys with the cryptocurrency exchange platform. The beginners prefer cryptocurrency exchange platforms, which allow online storage of different digital assets. Further, some exchanges allow the users to transfer the coins to their crypto wallet. Professional cryptocurrency traders prefer to go for additional storage options, which ensure that all the crypto holdings are safe and away from the cryptocurrency exchange platforms.
h. Tax information
Cryptocurrency adds additional complexity to the tax laws. Many countries count the gains from cryptocurrencies as capital gains. Hence, it becomes crucial for the users to know the value of the cryptocurrencies in dollars while selling or buying them. Some advanced cryptocurrency exchange platforms offer specialized forms like Form 1099- B to allow the traders to keep track of their losses, gains, and cryptocurrency cost basis.
The cryptocurrency exchange platforms allow the traders to keep their holdings on other platforms except for the personal wallets losing track of the cryptocurrencies. Thus, these platforms don’t offer any tax supporting forms.
Essential Security Features That Cryptocurrency App Must-Have
Do you know that globally, cryptocurrency thefts and hacks increased by 40% in 2020? Hence, the cryptocurrency exchange platform must include the necessary security features to secure the platform from possible digital attacks. Some of these essential security features necessary for any cryptocurrency apps include:
1. Registry Lock
It allows the cryptocurrency exchange platform to only lock the domain at the registration level. Registry lock adds security layer to the platform as hackers can’t delete the important parts of your domain. The changes to the domain after enabling the registry lock involve a detailed process. It involves a three-way security check between the domain registrant, the registrar, and the registry. Hence, the registry lock feature is necessary to achieve the highest levels of domain security.
2. Web Protocol Security
The next line is to secure the web protocol. It is important to safeguard the web protocol security as the most vulnerable part of the cryptocurrency exchange platforms. It can be done by HTTP Strict Transport Security protocol allowing all the browsing sessions to have HTTP protocols. The X- XXX- Protection prevents the cryptocurrency exchange platform from cross-site scripting attacks.
The web protocol security can be ensured with Content Security Policy or CSP, which enables the header to determine the type of dynamic resources having loading permission. Hence, all the risks of XSS attacks are eliminated with CSP. Last but not least is X- Frame- Options which protects the cryptocurrency exchanges from possible clickjacking attacks. It prevents the embedding of content in other sites.
3. Cold wallet
These wallets store cryptocurrencies offline and are safe storage for the users. Hence, the digital assets stored in the cold wallet remain secured from theft even if the cryptocurrency exchange platform is hacked. Integrating the cold wallet to any cryptocurrency exchange, an additional security layer is introduced in the app development. Some leading cold wallets use high-end security features like biometric-enabled authentication, multi-signature authentication, etc. Hence, allowing the traders to use cold wallets can save the cryptocurrency exchange from possible cyber attacks.
4. Domain Name System Security Extensions (DNSSEC)
All the Domain Name System or DNS queries are authenticated by a set of protocols incorporated in DNSSEC. It enables data authentication with public keys and digital signatures and rejects illegitimate DNS entries to the cryptocurrency exchange platform server. DNSSEC stops all the cache positioning and entering of fraud websites.
5. Anti-DDoS modules
The Distributed Denial of Service or DDoS disrupts the normal website traffic, server, network, etc., by overwhelming the website with internet traffic. Multiple cryptocurrency exchange platforms have suffered heavy downtime losses due to DDoS attacks. Hence, all the leading cryptocurrency exchanges prefer load balancers or network firewalls to prevent DDoS attacks. These anti-DDoS modules help cryptocurrency exchanges to perform safely.
Top Apps & Exchanges for Cryptocurrency Trading
It is one of the secure cryptocurrency exchange platforms which facilitates quick selling, buying, and trading of different cryptocurrencies. It is easy to manage the popular digital currencies in one place. Further, Coinbase allows users to secure their funds in the vault for time-delayed withdrawals. This exchange offers a one-stop solution on its simple interface like merchant tools, friends, online crypto balances, etc. Coinbase has its in-house digital wallet for protecting the digital assets of the users. With more than 4 million USD volume traded quarterly, Coinbase is supported by more than 100 countries globally.
|Investors||Tiger Global Management|
|Funding raised in the last round||300 million USD|
|Total downloads||1 million+|
|Developed by||Brian Armstrong|
|Available on||Android, iOS|
It claims to be the world’s fastest-growing cryptocurrency exchange platform. It offers over 250 types of cryptocurrencies and accepts more than 20 fiat currencies. The platform offers dedicated cards with more than 5% cashback, and it is easy to top-up it with cryptocurrency or fiat currency. It is easy for the users to select from the website or can download the dedicated apps. Crypto.com is the verified exchange, a highly secure place for global users to start profits from trading. Further, this platform’s deep order book liquidity under all conditions makes it easy for the traders to get the best out of this platform.
|Investors||Foris DAX Asia|
|Funding raised in the last round||4.5 million USD|
|Developed by||Kris Marszalek|
|Available on||Android, iOS|
It is another leading cryptocurrency exchange platform offering more than 2 billion USD average daily volume. Binance offers dedicated around-the-clock customer support in more than 40 languages. It has an open-access learning library called Binance Academy, offering crypto education in more than 20 languages. The Binance Research offers data-driven insights and analysis, offering institutional-grade research reports. The Binance Chain is the dedicated community-driven blockchain software system created by global developers. It further offers BNB, the digital asset with multiple utility forms and powering the system.
|Investors||Breyer Capital, DST Global Partners|
|Funding raised in the last round||500 million USD|
|Total downloads||2 million+|
|Developed by||Changpeng Zhao|
|Available on||Android, iOS|
It claims to be one of the most straightforward cryptocurrency exchange platforms. The company offers a crypto rupee index and systematic investment plan or SIP. It offers detailed information about the crypto trends, the latest crypto prices, etc., to help beginners and professional traders. This platform has recently launched a cryptocurrency buying plan for its users. It allows the users to systematically invest in more than 80 popular digital coins with specific monthly investments. Further, the CRE8 or Crypto Rupee Index helps traders know about the Indian market conditions.
|Investors||Andreessen Horowitz, Paradigm|
|Funding raised in the last round||260 million USD|
|Total downloads||10 million +|
|Developed by||Vimal Sagar Tiwari, Ashish Singhal, Govind Soni|
|Available on||Android, iOS|
It is one of the best-valued cryptocurrency exchange platforms offering more than 200 crypto assets. CoinDCX offers a 7m framework to select different crypto tokens before listing them on the platform. Hence, the exchange prioritizes investor protection globally. Further, it is easy for beginners and professional traders to buy/ sell, margin, futures, earn, and CIP. CoinDCX is covered by the leading asset insurance providers and risk monitoring systems. It has accumulated a trading volume of more than 10 billion USD.
|Investors||Bain Capital Ventures, Polychain Capital|
|Funding raised in the last round||135 million USD|
|Total downloads||10 million +|
|Developed by||Sumit Gupta|
|Available on||Android, iOS|
With more than 112USD billion being traded daily in different cryptocurrencies, it is easy for any business to start other digital marketplaces. The dedicated cryptocurrency exchanges allow global users to buy and sell various cryptocurrencies. Beginning with the quick definition of the cryptocurrency exchange platform, it becomes easy to understand the working of these crypto applications.
Not to miss are the different types of cryptocurrency exchange platforms which ensure that the business goes for the platform which suits their profit needs. The leading cryptocurrency platform features further ensure the companies create the exchange which serves customer needs.
It is essential to go through the main security features of any cryptocurrency exchange platform to make it effective against any possible cryptojacking. Last but not least, it is easy to understand the top cryptocurrency trading exchanges used by global users.
If you ever plan to build a crypto or blockchain app then Emizentech can assist you. We are an experienced and leading blockchain development company and create blockchain solutions for clients globally.