When you think of money businesses, you might think of Western Union, Travelex or your local money exchanger shop. However, it is becoming more and more clear that these types of money exchanger businesses are entering into a world of change.
With the advent of blockchain technology, which pretty much does all the accounting on the cloud for you, there is a huge opportunity for anyone to start their own exchange with cryptocurrencies – and all done from the comfort of your own home. For those interested to know more about how to take on this process, below are 6 steps needed to start your own crypto exchange.
Find a provider for your technical solution
Of course, you could start by creating your own exchange’s technical features from the ground up, but it is much easier and cheaper to create your platform with a white-label solution than to run your own software development team. Also, you may purchase legit crypto trading bots to get your jobs done easily.
There are several companies that provide customized, ready-to-use cryptocurrency exchange software, charging a one-time license fee without royalties or commission structures.
Alireza Beikverdi from exchange provider bitHolla says, “We’ve seen a larger uptick in usage of the open-source exchange software HollaEx Kit. The majority of these users are just starting to test and build with the kit which in a couple of months should show interesting crypto projects beyond just exchanges.”
This means that, in some cases, there is absolutely no ongoing fee, with customers being able to host the exchange and receive the full source code, which is important for audit purposes, as some regulators request an inspection.
Assemble a team
Even though the white-label solution comes in an advanced stage in terms of development, it probably will not be fully ready to use and fulfill all your requirements, especially as time goes by and the exchange starts to get traction.
With this in mind, it is very important for you to assemble of team of professionals who are knowledgeable enough in this niche to perform all tasks related to the platform’s maintenance and evolution, i.e., the development of new features. This can be said for most industries but, when it comes to money operations, you do not want to slack when it comes to system stability and reliability.
Also, it is extremely important to maintain legal compliance, especially because cryptocurrency laws are evolving rapidly and globally, so it is key to hire a full-time internal legal team or outsource reputable law firms, in order to keep your exchange legal in all locations where you will be doing business.
Server setup, cloud or on-premise
As one might realize, such a platform needs to be hosted on and run from servers. However, there is not just one option to go with here, so the question ends up being one related almost exclusively to performance.
The decision should also be related to the type of exchange you will be running – for example, a high-frequency trading exchange will have particular needs and requirements, which will not be so prevalent in other kinds of exchange.
Ensure the exchange has liquidity
The cornerstone of any successful exchange is liquidity. Without a range of offers and bargaining activity, potential customers may not deposit belief in your platform. To get around these issues, without facing the need to simulate activity through fictitious accounts within the new exchange, it is possible to connect yours to a network of other existing exchanges, increasing your liquidity.
Remember, the bigger the exchange network, the less liquidity will be an issue for your new exchange.
Share the word to gather users
After you go live with your new exchange, then the time comes to connect with news channels about the technology and financial markets. It is important to plan your marketing activities properly, along with your costs, to ensure that additional funding is not needed.
Often, exchanges do not include a marketing budget, instead, they focus only on the use of social media, until the business takes off. This is also a valid option, so in the end, it comes down to developing and following a good strategy.
Keep the users happy and provide the necessary support
While customer support is the last step in creating a successful bitcoin exchange, your ability to shine in this area will determine your long-term success. Those dealing with customers should be aware of and satisfactorily resolve any customer complaints or reports of technical issues.
Customers must be addressed in a timely manner, so plan to implement an efficient customer service system and equip it with experienced employees who are available 24/7, as cryptocurrencies never stop operating.
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