Since its inception in 2008, blockchain technology has had a massive impact on the Internet. Many businesses worldwide are working to incorporate blockchain into their operations.
But what exactly is blockchain, and how does it differ from everything else we’ve seen?
Blockchain was initially dedicated to Bitcoin cryptocurrency when it was invented in 2008 by an individual or group known by the pseudonym Satoshi Nakamoto. Since then, the technology has been used in various other fields.
In this article, we’ll explain how to build a cryptocurrency exchange, the core features of such a platform, and the 5 steps to your future cryptocurrency exchange development services.
How does Binance Work?
There are approximately 700 digital currencies available on the Internet, though not all are widely used.
Many people began to consider how to start a bitcoin business or something similar (since, in some countries, Bitcoin is illegal). To deal with such a large number of currencies, exchange resources began to emerge.
While there are dozens of exchanges on the market, they differ in terms of the number of currencies they allow for trading, their commissions, limitations, etc. Binance was one of the most recent cryptocurrency exchange market booms.
History of Binance
Binance is a Chinese-based company founded in the summer of 2017 by a group of highly experienced professionals. Changpeng Zhao, the company’s CEO, is now in charge.
Mr. Zhao had previously worked in the technical department at Bloomberg and Blockchain.info and was thus able to assemble a very strong team for product development.
The company has pitched the ICO and their token launch to kick things off with the cryptocurrency trading software. Initially disseminating information through the whitepaper, they reached their fundraising goal by mid-September, just in time for China to impose a ban on token fundraising. The financing round raised millions of dollars from venture capitalists (VC).
The newly launched Binance Coin (BNB) was announced to have a limit of 200MM and the ability to be used later within the company for internal service purchases.
Binance has also stated that they will eventually buyback and destroy half of the issued tokens. The ICO is nearly finished, with an impressive number of over 40,000 token holders.
How to Create a Cryptocurrency Exchange: 7 Essential Features
If approached correctly, the cryptocurrency exchange market has proven extremely profitable. Although the number of exchange platforms has increased, the quality of some resources’ services remains a concern. Because cryptocurrency exchange rates are unregulated, they have risen to unfathomably high levels, with no guarantee that they will remain there.
On the one hand, the enormous hype surrounding the question “how to build a cryptocurrency exchange like Binance Clone App“ makes this market quite competitive.
However, as the market matures, users’ trust in it grows and the benefits it provides to those who understand how to use it. As a result, developing a high-quality cryptocurrency trading app is a fantastic idea. So, let’s look at what you should be aware of and how to launch a cryptocurrency exchange service using the app.
The signup or login page is the first thing a user sees, but its main purpose is to protect the system from unauthorized logins, hack attacks, or other manipulations. As a result, this functionality should be very well developed and meet the highest standards. Aside from the standard login/password combination, there is also a 2FA option to provide users with additional security.
One of the reasons the crypto exchange market is so popular with users is that each user is thoroughly verified. Verified users generally have more options, depending on the type of verification. For example, the withdrawal limits for verified users are higher than those for non-verified users. Verification is necessary to ensure trade transparency and reduce the possibility of a scam.
This feature enables traders to deposit funds into the cryptocurrency exchange software’s internal wallet and withdraw funds to wallets outside of the software within the company’s limits.
Every user should be able to buy and sell currency to other users in the system. All trades must occur quickly and without any system errors. The system should provide several options for creating orders, allowing the user to select the most convenient one for them.
A very useful feature that allows the creation of various graphs and statistics for improved visibility.
API for Internal Use
The exchange’s API is required to allow users to create their automated trading systems or data exchange among verified devices using the cryptocurrency exchange script.
Employees of the exchange company will be able to monitor trades and manage actions on the exchange based on their access level with the help of the admin panel.
These are only the essential features of any application of this type. Much more needs to be added to the app to make it usable, secure, and user-friendly.
How to Create a Cryptocurrency Exchange
An exchange trading system, such as Binance, would necessitate the following app-development considerations:
This is the first thing the client sees before using the application. To create a harmonious design that combines both beauty and usability, we recommend that you follow current best practices and consider product requirements. The stages of design creation are as follows.
1. Wireframes – the future design’s foundation, where its key features are implemented.
2. Prototype – a detailed visualization of the user’s interaction with the application that allows for the prevention of potential UX issues.
The API is the application’s back-end component that is not visible to the end-user. The server component of the application is in charge of the application’s internal logic and basic functions:
1. Identification and authorization of users
2. Admin panel server-side function
3. The newsletter
4. User cryptocurrency bets and transactions
5. API that third-party organizations can use
Blockchain is the component responsible for actually processing and storing data about user transactions in a secure environment (any alteration by any party is impossible thanks to the blockchain).
It is a necessary component of modern platform development. It is critical because it allows for identifying and eliminating the majority of bugs in the logic and the UI before launching the application.
Because the application stores sensitive information about its users, it must be properly secured to prevent data leaks and hacking attacks. We recommend securing user information in the following ways:
Secure architecture: When developing the application’s back-end, pay special attention to creating a secure method of storing and exchanging confidential information.
1. The exchange’s key components are distributed across multiple servers and communicate via dedicated channels.
2. Encryption keys are also kept on dedicated secure servers.
User authentication: To prevent unauthorized access to the user account, it is best to use two-factor authentication by generating a one-time token. Additionally, users receive notifications when someone logs into their account, including the location and IP address.
The encrypted data is exchanged using the most recent algorithm, SHA-256, which is currently impossible to hack. It generates a hash – a unique text signature that changes each time the initial message is edited. It allows you to see if the hash you sent matches the one you received and if the data was edited. The original message cannot be decoded because a hash is not encryption.
Given the current popularity of crypto exchanges platform like coinmarketcap worldwide, it is understandable why more and more people are becoming involved in these systems.
Digital currency exchange offers excellent opportunities for those who are new to the market and those who have extensive experience in it. However, depending on the country or currency provided, the market still has several limitations, which always means room for growth.
Developing a high-quality application for your own cryptocurrency exchange company can result in a large profit in a short period.