Can you see yourself managing your own Bitcoin trading platform? Compete aggressively; there are lots of pretenders out there.
According a study by Future Market Insights, the global market for cryptocurrency exchange platforms is currently valued at around US$37 billion. The market research firm also predicts that the global crypto trading platform market will grow at a CAGR of 14% during the next 10 years, spurred by growing adoption and consistent advancements in the field of cryptocurrency.
Though we don’t mean to dampen your spirits with this piece, please know that it isn’t our purpose to do so. We plan to compare and contrast the advantages of a white-label bitcoin exchange with those of building one from scratch. Bonus: There’s a chance we can provide you a third option as well. With this knowledge in hand, you won’t have to start off with a bang by making a major mistake.
Outline of Major Sections
- There are two options for setting up a Bitcoin trading platform.
- Software for white-label cryptocurrency exchanges is being developed from the ground up.
- Can something else be used instead?
It is possible to set up a cryptocurrency trading platform in either of two ways.
There is no doubt that cryptocurrency usage has increased globally during the past several years. However, there have been a number of established communications. You need to be aware of the cutthroat competition because there are so many of them around the world.
Having nothing to work with
You’ll need at least $350,000 in funding to begin your bitcoin exchange the traditional way. Considering how obvious it is, what could possibly be the point? To the untrained eye, it makes perfect sense. We know the competition is stiff, so coming up with innovative ideas right off the off is essential.
Users are used to a specific set of answers, though, so it will be difficult to stand out from the crowd. White-label providers also give you the freedom to design your platform as you see fit (with some limitations). So, what exactly is the point?
When you build a new platform from the ground up, you expose yourself to many unknowns. It’s difficult to avoid making mistakes or falling behind schedule when starting something brand new. This means you’ll have to pay more money, wait longer for execution (since making an exchange can take anywhere from 8 months to a year), and there’s no guarantee that the end result will be something that users will adore.
We think this is a risk that occasionally pays off, especially if you have the means and the foresight to create a game-changing product.
White Label Bitcoin And Cryptocurrency Exchange Platform
A White-label Bitcoin and cryptocurrency exchange is one that may be used by anyone without their branding being revealed. Anyone can use this market to buy, sell, trade, and store cryptocurrency for other cryptocurrencies or fiat currency. Using a turnkey white-label solution, aspiring entrepreneurs may launch their own bitcoin exchange in a matter of minutes.
Most commonly, software like this is encrypted using state-of-the-art security techniques, making the system impenetrable to hackers. Depending on the needs of the company, a white-label system can be adjusted to operate as a decentralised, peer-to-admin, or centralised cryptocurrency exchange.
Happily, you may pick from a number of white-label Bitcoin exchange businesses. Some of the most well-known white-label Bitcoin exchange development firms, include AlphaPoint, CED, and Modulus.
Can something else be used instead?
The Internet is rife with preexisting cryptocurrency exchanges, some of which may or may not be fully functional, and whose owners may be open to selling them again.
If you have an idea but don’t want to start your own brand from scratch, you may do that. Typically, if you go with that route, you won’t just be buying the software, but also the company behind it, along with all of its legal protections, licences, user base, etc. That can also help you get your project up and running faster.
Which situations call for the employment of a White label cryptocurrency exchange?
It’s best to build your exchange software from scratch if it’s completely unique and doesn’t share any features with existing exchange-focused software. Borrowing, borrowing, and derivatives are all use cases that require additional customization and complexity, making them inappropriate for white-label solutions. Our turnkey white-label platform allows would-be entrepreneurs to launch their own bitcoin exchange in a matter of minutes and with minimal outlay of time or resources.
Tips for creating a white label bitcoin trading platform
Let’s have a conversation about setting up a private label bitcoin exchange. We’ll also talk about all the things you should do first.
First, decide between two white-label alternatives.
- A white label licence or a white label solution are your two choices.
White-label software licences are a type of business licence that provide an enterprise with a turnkey answer to a common problem. It could be a generic piece of hardware or programme that will be given out to customers. In order to acquire fully functional, pre-licensed software.
White-label software is software that is sold under the customer’s own label. Its stated goal is to aid its users in being more effective and efficient in their work. It can be used by those who either have a fully formed business idea or a well-defined list of requirements.
- Determining an audience and a specific specialisation
Before starting to engage with a technology partner, make sure you have a solid understanding of the kind of business you intend to run. Using this data, you may choose the best approach to building the software’s structure.
One of the most crucial factors to consider is the ease with which you can obtain liquidity and security. If you have the technological know-how to construct a white-label exchange, you can expose your brand to the widest possible audience. There needs to be a secure and liquid market with a high volume of transactions to facilitate such conditions.
If you want your white-label exchange to be successful, you need to create a platform with the features and functionality necessary to suit the expectations of your users.
- Choosing the Regulation
You need government oversight of the financial sector to run a successful firm. It has ramifications for a number of aspects of running a business, such as taxation and the types of services you can offer customers. For instance, you can’t let Chinese consumers trade Bitcoin because of the ban on virtual currencies in their country.
Regulation of cryptocurrencies and exchanges is subject to widely varying legal frameworks, depending on the country and the regulator. Given the explosive growth of the sector, it is essential to keep tabs on the publishing of relevant legal papers.
- Procedure for handling liquidity
One of the first things to think about when creating a white-label bitcoin platform is how to deliver liquidity. Investors can now buy and sell assets on the platform. If they have sufficient liquidity, their orders will be executed more swiftly.
One of the most common approaches to developing a bitcoin “white label” platform is a “prime of primes” configuration. This can only be accomplished through cooperation with a third-party provider who provides Tier 1 liquidity.
The term “non-bank liquidity provider” (NBLP) refers to an alternative to traditional banking methods of providing liquidity. Thanks to this agreement, a cryptocurrency exchange can provide its customers with prices compiled from a wide range of liquidity providers. Unlike with a Tier 1 vendor, the company will save money by not having to pay commissions using this method.
- regulations on Know Your Customer and Anti-Money Laundering
Before releasing the white-label cryptocurrency exchange, you must ensure it is safe to use. This can be done by launching a business that already has the necessary processes in place.
To prove their identity and eligibility to trade, prospective bitcoin exchange users must complete KYC (Know Your Client) verification. This method can also be used to keep an eye on potential cybercriminals.
In the Know Your Transaction (KYT) process, a user’s funding methods and trading activity on the bitcoin exchange are reviewed. It may be impossible to send or receive money if its origin is questioned.
Most countries have passed rules that cryptocurrency exchanges must follow in order to control and stop money laundering and terrorist financing. These laws are known as AML (Anti-Money Laundering). In the United States, for instance, it is mandatory for businesses to employ a trained officer to prevent money laundering.
- Identifying a reliable source
If you have a detailed business strategy, now is the time to start looking for a compatible business partner. Make sure you find out as much as possible about them and tell them all they need to know. Make sure the technology provider you choose can quickly and efficiently meet all of your company’s needs. You shouldn’t just ask about their experience, but also their technical abilities.
This is only one side of the story, however, as there are other components inside the exchanger. When looking for a top-tier digital currency trading platform, be sure to keep the following in mind.
White-label exchange solutions can be a great approach to enter the market in a low-cost and low-maintenance manner. With white-label solutions from reputable providers that have undergone significant testing, you may reduce the risks associated with building bitcoin software for your business.
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Written by: Silvi Willemson | Edited by Arun Shakyawar
Aboout the Author
Sophia Mills is a content writer with Suffescom, a web3 consulting company. She writes on the blockchain industry trends reflecting the viewpoints of her company.