The number of cryptocurrency is growing, cryptocurrency exchanges are very popular, and their owners earn thousands of dollars per day. Against this background, entrepreneurs are thinking about opening their own stock exchange. How to open a cryptocurrency exchange and how difficult is it? How appropriate is it now and what should you know? We will describe in this article!
How to open a cryptocurrency exchange: basic steps
For example, license is required in some countries, for which you will need a couple of months to collect papers and have several tens of thousands of dollars of capital (Japan, for example). However, the exchange will receive a legitimate status that will increase the level of customer confidence.
An alternative is the opening of a crypto-exchange in the jurisdiction of another state, for example, in an offshore zone (a zone free from regulation, taxes, etc.). Offshore companies annually pay a small fixed amount to the “host” state, and the registration process takes up to a month.
You can place the stock exchange on the servers of the state that does not have a clear position on cryptographic activity. Legal expenses do not require this option.
However, one thing has to be taken into account – the position of the state will be formalized sooner or later and may entail costs associated with giving a legitimate status to a crypto-exchange, with its transfer or closure.
The purchase is certainly preferable, since it will be entirely under the authority of the owner of the exchange. However, the purchase will cost $ 2 3 thousand at least.
Hosting is convenient and profitable (the monthly fee is up to $ 100), but it is dangerous for resources related to finances. Server owners will have access to them, and no one will guarantee that they will not use it for personal gain.
However, the last one can be done by any programmer, and therefore, for maximum reliability, it makes sense to hire competent testers from the outside, better than one.
The exchange may be international, and may be aimed at an audience of a particular state. From the answer to this question will depend on what currencies will need to “tie” to the exchange.
A small exchange, aimed, for example, at the Ukrainian audience, will have to ensure the exchange of cryptocurrencies for the Ukrainian hryvnia. And international, on the contrary, can abandon small national currencies and provide only the dollar and the euro.
To conduct operations with traditional currencies, you will have to interact with traditional financial structures – banks, payment systems. In the absence of fiat currencies on the stock exchange there is no need for this.
The more cryptobug users have (satisfied with its work), the more new ones come. This law also works for barely appeared exchanges where are no users, such resources are bypassed. Therefore, the first steps in the promotion are the most difficult, and that they need to pay the most attention. You can advertise the exchange
Finally, a cryptocurrency exchange can be opened by holding an ICO – and then the ICO and the bonuses that the ICO organizer offers to investors should ensure its popularity.
These are the main steps that need to be taken by an entrepreneur. However, you need to take into account a number of other nuances that, with proper execution, will ensure the competitiveness of the exchange and the influx of users, and if they are not taken into account, they will lead to the failure of the project.
How profitable is it to open a cryptocurrency exchange today
The initial investment is great for the average person, but justified for the entrepreneur: the earnings from the owners of successful cryptobirds are high.
First of all, it is the transaction fees. They usually make up to 0.5%, but most exchanges take 0.1-0.2%.
In the second, commissions for depositing and withdrawing money, mainly cryptocurrencies, since payment systems and banks establish a commission for entering withdrawal of Fiat. However, it should be noted that the commission for entering or withdrawal cryptocurrency is an unpopular measure.
You can also enter the possibility of margin trading and charge a fee for it. This means that some users will be able to give a kind of credit for the trade of others, and the exchange will act as an intermediary and guarantor for the lender.
The above mentioned promotes the exchange among users, which leads to large incomes. The scheme of cryptocurrency exchange is such that the more users are, the more actively they use the services of the exchange and conduct transactions, the higher the income of the owner is.
Successful, well-created, well-protected, user-friendly exchanges that allow the use of cryptobots (i.e., created without saving on programmers) and have a digestible commission, turnovers of $ 1 10 million per day, which brings the owner, respectively, $ 1000 and $ 10 thousand per day with a commission of 0.1% and twice as much – with a commission of 0.2%.
Of course, part of the funds will go to pay for the labor of specialists, equipment support, and so on. The net income of cryptocurrency exchange with a turnover of $ 10 million and a commission for only 0.1% trade transactions will be $ 200,250 thousand per month. If you add other methods of earnings, then this figure can be raised at least twice.
Inattention to legal issues may entail the closure of the exchange and even the administrative responsibility of its owner. Failure to introduce quality protection equally or later will lead to hacking of the exchange and, probably, theft of funds, which for the owner can also turn into troubles up to arrest.
Inattention to users will lead to a fall in turnover and a decrease in total income, as has happened on many crypto counters, where transfers are constantly hanging, and technical support has not responded to users for weeks.
And vice versa, if you follow your project, it can bring millions of dollars in revenue, and examples of this are top billion cryptocurrency exchanges, which also started with small Bitcoin exchange resources.