Bitcoin Exchange

All You Need to Know About Starting a Bitcoin Exchange

By March 23, 2018 No Comments

A bitcoin exchange can be termed as an encrypted online marketplace where an individual or trader can buy or sell bitcoins via fiat currency and altcoins among others. It acts as a highly secure intermediary between the buyer and seller for trading of Bitcoins.
How Bitcoin Exchange Works
Just like normal stock exchange works, traders can buy or sell Bitcoins by placing either a market or limit order on the portal. Market order allows the trader to authorize the exchange to buy or sell Bitcoins at the best available price in the marketplace. However, limit order authorizes the exchange to trade coins below or above the currently placed bid solely depending on whether the coin is sold or bought. Aside, limit order also allows the trader to set a limit above or below which the coin is not sold or bought.
With cryptocurrencies like Bitcoin being the latest and safest means to execute financial transactions, the value of Bitcoin has increased astronomically in the past few years. This is why more and more people have started trading Bitcoins for capital gains and to execute transaction via exchanges like Belfrics. Apart from that, traders can also store coins in Bitcoin exchange. If you’re wondering how we—at Belfrics—do it, here’s a glimpse into what it takes to start a bitcoin exchange.
Conduct Extensive Market Research
If you want to operate locally then you have to research only about that country’s law with respect to Bitcoin transaction. But in our case, where we operate on a global scale, it is critical for us to understand the legalities and regulations involved in each country related to Bitcoin transactions. Our in-depth research has helped us acquire the necessary approvals and licenses from concerned authorities before starting Bitcoin exchange.
Extensive research also enables us to get relevant insights about which markets are better, which is helpful for us as well as our clients.
Collaborate with a Bank
Collaboration with a bank is essential to process payments done through fiat currency. Prior to setting up our exchange, we did thorough research about online facilities provided by various banks, their market reputations and how fast it is capable to process transactions via payment gateways and through manual remittance as well.
Have Ample Amount of Liquidity
Having a desired amount of liquidity at the starting of a Bitcoin exchange is one of the major challenges one has to deal with. To attract customers, it is essential to showcase full order books and trading activity. The easiest way to combat this situation is to develop an API interface which can join your existing Bitcoin exchange to already existing exchanges. One can also simulate trading activity by buying and selling among a couple of artificial accounts. Belfrics combines the feeds of multiple exchanges to provide an extensive pool of liquidity for effective trade execution.
Implement Robust Security Standards
To ensure the safety of traders’ money and their data it is imperative to implement a robust state-of-the-art system in place in the Bitcoin exchange. At Belfrics, we have deployed multiple layers of security systems— such as two-factor authentication, encrypted wallet access and deep-freeze security—to ensure complete safety of trading with us.
Have a Customer Support System
Leading Bitcoin exchanges like Belfrics operate with a robust and customer friendly support system to ensure traders are able to execute transactions minus any issues.
These are some essential steps that we have taken to set up our Bitcoin exchange platform at Belfrics. As a leading cryptocurrency exchange, we aim to provide novice as well as pro traders a highly rewarding experience of trading in Bitcoins and other cryptocurrencies.

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