Cryptocurrency might have been conceptualized to simplify, universe allies, and provide uncontrolled access to finance on a global scale. However, from a technological and practical standpoint, it almost sounded like a Rube Goldberg apparatus. The credit of playing Prometheus to the fight of cryptocurrency should belong to White label cryptocurrency exchanges.
What was once confined to mining and machines with impeccable processing powers was now brought down to simple smartphones with Internet access. Cryptocurrency was not any longer confined to high-performance machines and technical experts. Market analysts could, with their foresight, predict the direction of volatility and make a profit by buying a crypto asset at a certain cost and selling it at a higher price.
Without question, cryptocurrency exchanges have opened up the pathways to profitability even for common people. However, parallel to this, there was another segment that was winding its profits. It was the entrepreneurs who created a business out of cryptocurrency exchanges. Cryptocurrency exchange development has evolved into a lucrative business idea because of the amazing prospect of profit it offers.
Before we explore the areas of profitability, we need to understand what a cryptocurrency exchange is all about, it's relevance, and its feasibility as a business.
What is a cryptocurrency exchange?
A cryptocurrency exchange it's a software that enables trading of crypto assets between buyers and sellers. It can manifest itself as a website or mobile application. A cryptocurrency exchange engine matches buyers and sellers and facilitates trading between them at predetermined market prices influenced by factors like demand, supply, and acceptance.
How does a cryptocurrency exchange make its profit?
There are different avenues for realizing your profit in your cryptocurrency exchange business.
Most cryptocurrency exchanges charge a transaction fee or a commission for every trade. The commission can be as low as 0.01%. However, the humongous number of transactions can make this profit alone ran into billions of dollars.
Instead of going through the hassle of having a token listed on an exchange, a lot of entrepreneurs prefer to offer their tokens as a direct offering from the cryptocurrency exchange itself. The exchange can, to list the tokens, collect a fee from the crypto entrepreneur.
Just like any other website and mobile app, a cryptocurrency exchange can also run advertisements and sponsorships.
All these, when brought together, converge into massive profits for the cryptocurrency exchange business.
How to start a cryptocurrency exchange business?
Now that we are aware of the possibilities of profitability, it is only natural that in a crypto entrepreneur would want to create a new cryptocurrency exchange. There are different ways to build your crypto exchange software.
You can consider hiring your own team of crypto developers or outsource it to company that specializes in cryptocurrency exchange software. Alternatively, you can also consider using a white label critter exchange software. A white label cryptocurrency exchange platform is available ready-made and with a few elements of customization, you can launch your own cryptocurrency exchange business without much delay. The white label solution also ensures that your cryptocurrency exchange is free from bugs that might interfere with the basic functionalities of the exchange.
How to launch your cryptocurrency exchange business?
In addition to the technical side, there are a lot of other superficial-yet-crucial aspects to be covered when launching your cryptocurrency exchange business.
One of the first things that needs to be taken care of is the legal dimension. Unfortunately, the laws governing anything related to cryptocurrency and blockchain technology have been quite uncertain. A few jurisdictions like the United States, Malta, Estonia, and Singapore have regulated everything related to crypto. Since the laws are bound to change frequently, it is strongly recommended that you take assistance from a legal team that stays constantly updated on the latest regulations.
In addition to the legal aspect, the general rules that apply for any financial business will also apply to the cryptocurrency exchange business. This would mean that your company will have to comply with the KYC/AML formalities to ensure that the profit that your investors get from your cryptocurrency exchange is not siphoned into malicious and terrorist activities.
Another abstract aspect that determines the success and profitability of your exchange business is liquidity. Contrary to the classic definition, in the context of a cryptocurrency exchange, liquidity refers to the volume of transactions that happen on the exchange. Indirectly, it translates into the ease with which you can convert one crypto assets into another.
To ensure your investors find a considerable magnitude of liquidity, you can either consider simulating trading between artificial accounts if you have a centralized crypto exchange. If you have a decentralized exchange you can consider connecting your crypto exchange through an API to another exchange, so you can benefit from the liquidity of that exchange.
Even if everything mentioned above falls in place, your cryptocurrency exchange might not give its profits if you do not engage in effective marketing. There might be a few restrictions when it comes to mainstream advertising platforms like Google and Facebook when advertising anything related to crypto. Therefore, you should engage in different forms of marketing like participation in crypto forums, search engine optimization, and organic social media engagement.
Why choose a white label crypto exchange software?
In addition to the obvious advantage of time and reliability, using a white label solution presents a plethora of advantages.
The customizability ensure that the white label crypto exchange can bear the skin of your brand. You can embellish the cryptocurrency exchange with all your branding elements in terms of logo, name, design, font, and color.
Most white label solutions do not use open source code available on places like GitHub. Although open source codes are simple to work with, they are also highly susceptible to hacks and such malicious activities. With a white label solution, you can be assured that the code is quite secure.
A white label solution would be able to provide the boost of a combination of watt Microsoft and Apple did to the world of computers. On one side, it makes the business affordable by bringing down the cost of the cryptocurrency exchange software. On the other hand, it also makes it possible for people without a technical background to explore the cryptocurrency exchange business arena.
One of the most practical advantages provided by a white label crypto exchange software is that the provider is most likely to give you 24X7 support during the launch of your exchange. This will ensure that any glitch or hiccup that you might face is effectively addressed.
It is true that the white label crypto exchange software makes the entire process of launching cryptocurrency exchange fast, easy, and efficient. As a business owner, it is important to know the key features that make a cryptocurrency exchange irrespective of it being built from scratch or being purchased as a white label solution.
Features of a White label cryptocurrency exchange
The epicenter of any cryptocurrency exchange yes it's matching engine. The matching engine takes care to match the buying and the selling orders placed on the exchange. This brings us to the next question of where these orders will be placed. These orders are recorded on a digital decentralized ledger called the author book.
While the centralized exchange matches the orders and execute it right within the ecosystem, a decentralized exchange connects the buyer and the seller and completes the order through a smart contract based escrow. Simply put, centralized exchange functions like Amazon where is a decentralized exchange functions like craigslist.
There is a need for investors to store their crypto assets. Therefore, a crypto wallet should be integrated with your cryptocurrency exchange. The hot wallet is the one connected to the network which could be a mobile or a web application. A gold wallet is the one that stays outside the network and it could be a USB device or even a piece of paper with the keys printed on it. Needless to say, the cold wallet is more secure than the hot wallet.
Irrespective of what stays under the hood, the user interface of the cryptocurrency exchange needs to be intuitive and interactive. It should be remembered that people who will frequently use the crypto exchange our investors who have a thorough understanding of the market and the fluctuations. It should be designed in such a way that the intended action can be swiftly executed as even seconds might result in a drastic change in the profit.
Overseeing all the activities of the crypto exchange should be an administrator. The administrator is responsible for the general health of the exchange. They should have the power to enable or disable users and handling customer support. They should also be able to delegate customer support to a team if needed. They should be able to view all the vital statistics of the exchange including but not limited to the commission, the total profit, and every other quantity that will provide the business intelligence.
The practicality of a white label crypto exchange has already been established. If you are one of those aspiring entrepreneurs who would like to create a profitable business out of a cryptocurrency exchange, all you need to do is get in touch with a company that specializes in the creation and customization of white label cryptocurrency exchange platform.
They will ensure that the process of cryptocurrency exchange development remains the last of your headaches. The customization also ensures that the crypto exchange trumpets your brand language in every possible aspect.
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