The cryptocurrencies boom forced analysts to talk about bubbles, and late "miners" to buy up video cards.
Meanwhile, many people have already earned enough money on the trend: someone did it on the appreciating prices, and someone, as in case with nVidia, profited on the growing demand for related issues.
There are a lot of debates over cryptocurrencies’ potential, about possible sell-offs, and the time in which the bubble may burst.
However, while the market talks, it’s worth looking around to understand the way to profit on the trend. If there is a demand for cryptocurrencies, it means the trade venues for these assets will be popular as well.
Today, there are already about 200 cryptocurrency exchanges and exchangers in the world. And it is not a limit has been reached yet. So, what if the next stage of the crypto market evolution is the boom of cryptocurrency exchanges. If so, how can we profit on that? Perhaps open your own exchange.
How to open a cryptocurrency exchange
First, you need to resolve a legal issue. It is necessary to obtain a license. This is possible in several ways.
1. It is possible to obtain a Japanese license, but it will cost a lot. Investments may amount to at least $110K, and there is around $30K more for office expenses in Japan.
2. It is possible to register the company in jurisdictions, where there is no legal base for crypto exchange, but at least it’s not banned. It all depends on what you can afford and on available resources, but even with sufficient capital you still need to find a director complying with regulators’ requirements, lawyers who know all the details of licensing process, and much more.
Secondly, you need to develop the required software.
1. User Personal Account. It’s a profile for client registration and verification, with deposit/withdrawal options available. To write such a program you will need to invest effort, time, and money.
2. Trading platform. This is a place through which investors and traders can open, close and manage market positions. You’ll also need to think about each nuance, such as the development of gateways, connectors and bridges for platform connection. Writing the platform will consume time and money. There are major vendor lease providers of trading platforms in the world – you can choose, launch, customize and get services for the best of them.
3. Aggregator. It will allow you to connect new partners, other exchanges and even to become a market maker for some of the tools (e.g. if you create a cryptocurrency/token and want to add it to the list of trading assets at your crypto currency exchange). You must consider that your aggregator needs to process huge data volumes every second. At a rough estimate the cost of such a solution will be impressive, considering the number of expensive specialists and the time spent on development, therefore even large companies prefer not to write software, but to pick something available in the market.
All in all, the scope of work and investments required is considerable. However, there are cases when it’s worth going along a streamlined path rather than searching for your own original way. Where there is demand, there is supply.
Even now at the start of this new crypto era some companies already offer the development of turnkey trading floors and exchangers, taking into account customer desires.
Such services can considerably reduce your time, efforts, and expenses.
- By Artur Azizov, B2Broker CEO