Bancor Network stormed the crytpocurrency exchange in 2018 with the ER20 smart contracts. This new development has all details of transactions encrypted within its structure. Whilst 2018 saw the advert of several decentralized cryptocurrency exchanges.
The Bancor Network ER20 smart contracts edged others by replacing the centralization factor with the cross-chain liquidity and the brought in the implementation of core values of the blockchain as network participants now have total control over all their digital assets.
The product which was first launched in Isreal is gradually getting market acceptance and of course penetrating other regions. The blcokchain and cyber security experts built the front-end using Laravel and the backend was solidified using Zeppelin ensuring maximum security and trade functionalities.
Projection into the coming year will see more industries embracing the blockchian technology. Multiple industries have seen more reason to integrate the emerging payment option into their day-to-day activities. Crypo coin exchanges have been found useful in real estate, data processing and there was a leak news that MasterCard has begun to develop its own blockchain APIs.
The frustration that comes with many exchanges whether they be crypto or not are the fees charged for the transaction. Fees can eat up a substantial amount of your profits over time. Especially if you’re buying and selling on a consistent basis and getting charged a fee for each trade.
Over time many people began to favor decentralized crypto exchanges due to their complete omission of fees. With the recent popularity of Bitcoin, many other individuals started creating their own crypto exchanges in order to profit from the mass volume of trades occurring on a daily basis. In addition, many exchanges were set up to facilitate the trading of cryptocurrencies as there use had not yet become mainstream.
However, that’s not to say that these exchanges don’t have a dark history. Back in February 2014 one of the largest cryptocurrency exchanges shut down and filed for bankruptcy protection in Japan. This was purely to do with a large theft of Bitcoins from a digital wallet in which the intermediary stored all the transactions of the buyers and sellers.
As a result, these buyers and sellers soon became their creditors. In addition, many state-owned regulators in various parts of the world such as America (SEC) have begun to start regulating these exchanges in order to prevent this from happening on a mass scale.
Classification of cryptocurrency exchanges
Based on their organizational hierarchy and their overall controlling bodies, cryptocurrency exchanges are usually divided into two, as discussed before. Let us dive into each one of them, and discover what secrets the world of cryptocurrency exchanges holds.
Centralized cryptocurrency exchanges are run by trusting someone else with your money -- a third party or independent organization. These organization manages and take care of whatever assets that are traded on the network. Although people often think this is a safer than managing all their money they invest themselves. This is partially true as professionals trained in business analysis handle this pool of funds on behalf of people.
So, we have discussed centralized cryptocurrency exchange, we will be discussing the various type of centralized cryptocurrency exchanges. There are two classification of cryptocurrency exchanges;
Synchronous exchanges: This is occurs when customer’s request is decided by a single transaction. They are often small-scale exchanges and are very prone to fiasco. They mostly run into issues when handling large pool of transactions.
Asynchronous exchanges: This consists of interfaces to accept user requests and add them into orders. These is then processed using different layers independently and the status of the request is then passed to the interface of the traders. This exchange does hit waterloo when scaling occurs and is capable of handling large amount of transactions.
The centralized crypto currency exchanges are similar to conventional banks. Saving their money on the exchange, logging in with sophisticated security interface such as two-factor authentication.
This can be dated to 2009 when Satoshi Nakamoto development the first cryptocurrency code. He introduced the first coin in the world, Bitcoin which is the most popular cypto coin in the world as at today. While development this ingenious project, he created the firstt blockchain database.
Diverse researches has gone into understanding how it works. This is the trick, we can like the new invention to forex trading, it will be easy to digest how to trade crypto coins that is the cryptocurrency exchanges will be easily understood.
Cryptocurrency exchanges are the easiest way to trade in crypto-fiat and crypto-crypto pairings being an online platform. Exchanges are mainly of two types, grouped on the basis of their nature. There exist centralized and decentralized exchanges. These two have different hierarchies of operation and governance.
It is important to comprehend the diminuendos of volume in these exchanges. The volume of trade in a crytopcurrency exchange, the fewer the chances of market manipualtio and volatility. A high volume is important to keep the exchange ticking and keep the profits for traders on the high side. On a contrast, for low volume sites, buying would some sell orders fading out, thereby making the price of the cryptocurrency necessarily up and trader lose their money in the process.
Now you have an overview of centralized exchanges. Alas! They do not adhere to the whole goal of a cryptocurrency, being a decentralized currency. The chief main of cryptocurrency is to eliminate middleman and do without centralized bodies. The crypto industry birthed decentralized cryptocurrency excahnges as a cover up for the back draws of a centralized exchange. Now, you can safeguard your money yourself instead of a third party or organization. Trading and other financial transactions are done by you.
You cannot do without these features if you want to set up a standard cryptocurrency exchange platform. This features will allow enabling accurate trading service and deliver services based on trust amongst others:
Easy and advanced API integration
The API interface will allow hitch-free and completely customizable API integration mechanism. It is essential to link your platform to allow businesses and app developers to integrate your coin wallet and trading portal on their websites and apps for easy currency trading.
Accurate exchange engine
There are fluctuations in the price of crypto coins due to the volume of trade. This needs to be monitored when you have an exchange platform. The feature that enables you to do that is an exchange engine which counterbalances your coin with others.