The cryptocurrency market has been growing exponentially in the last decade. Due to the fact that this type of market is relatively young and unpredictable, many entrepreneurs and large enterprises started to establish their own exchanges. Are you one of those who are looking for how to create cryptocurrency exchange? If that is the case, there are several factors you should definitely consider before proceeding. In this article, we will share what types of crypto exchanges are out there, what you should consider when creating one, as well as beneficial advice.

Crypto exchanges are platforms where users can exchange, stake, or invest in various crypto assets. These exchanges act as a digital space between buyers and sellers, allowing the transaction to take place. Remember that modern exchanges are classified into two types: centralized and decentralized, where both have their specifics.

Participants are able to use their crypto assets to work with their Bitcoin, Ethereum, Litecoin, and many more. These are the most known and most utilized crypto assets. However, there are also less popular and used assets. If you are looking to start your own crypto exchange, you should decide what form of exchange you want in the first place.

Crypto exchanges are unquestionably the most efficient place to work with cryptocurrencies. However, it is more than that, and it is way more challenging to run such a business than it might sound. Before starting crypto exchange, you must consider and implement aspects such as security, fees, payment methods, supported currencies, and many more.

Below are the four main factors to consider:

Security: The platform’s security is the primary factor when developing cryptocurrency exchange. Consider implementing two-factor authentication (2FA), which is used by most respected exchanges. Besides that, employ data encryption which will add other security layers to the exchange. Developing a centralized exchange, which companies run, usually should involve third parties.

Fees: A further crucial factor to consider is the platform’s fees. Evidently, every exchange is unique, and all of them charge different fees than others. Therefore, compare rates before starting an exchange. Certain exchanges also provide various discounts or incentive programs to loyal users who use the solution on a daily basis.

Payment methods: Most cryptocurrency exchanges only accept specific payment methods, such as e-transfers or credit cards. Most progressive exchanges offer more efficient choices, such as PayPal or payment directly by cryptos. It is better for your reputation if you provide the most popular payment methods.

Supported cryptocurrencies: There are almost 20 000 coins and tokens available as of June 2022. It is highly recommended to consider the selection of supported cryptocurrencies while establishing a crypto exchange. Some exchanges accept the leading coins, while others accept hundreds of them. Do the research in digital crypto communities to offer those coins that customers prefer the most.

What are the obstacles you may encounter if you plan to start a crypto exchange?

Lack of regulation: The most problematic and challenging factor is a severe absence of regulatory oversight. Since cryptocurrencies are currently unregulated by most governments, it is often pretty difficult to establish an exchange. Because there are no regulations or norms to follow, it isn’t easy to ensure that your platform complies with all applicable laws.

Volatile market: The cryptocurrency market together with exchanges face significant volatility almost daily. This factor makes managing an exchange challenging because every owner must be prepared for quick changes in the market.

Hacking risks: Crypto exchanges are perhaps the most attractive target for cybercriminals. Since cryptocurrencies are held solely in digital form, hackers try to steal them quite often. A lack of a robust security system can result in the loss of funds of your consumer, which will lead to a significant exodus of your exchange.

Lack of customer support: Insufficient customer service is yet another issue that crypto exchanges face pretty often. There aren’t many client support choices for users who require assistance because the industry is so young. This can make it even more challenging to address problems or respond to inquiries in a timely manner.

Technical challenges: Last but not least are technical problems that crypto exchanges face is the difficulty in running a solid, round-the-clock working platform. Exchange systems must be constructed thoroughly, and every detail must be working to its full potential, which can be a complex and time-consuming process. Furthermore, to keep pace with constantly changing market environments, exchanges must be regularly updated and maintained.

To summarize, there are various aspects to consider while opening a cryptocurrency exchange. These obstacles include regulatory ambiguity, volatile markets, and technical proficiency. Overcoming these challenges and developing a lucrative crypto exchange is possible with appropriate research work and implementation of the most efficient tools.