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Home / Blog / What is Bitcoin & Cryptocurrency Exchange? A step-by-step startup guide for Beginners

What is Bitcoin & Cryptocurrency Exchange? A step-by-step startup guide for Beginners

What is Bitcoin & Cryptocurrency Exchange? A step-by-step startup guide for Beginners

If you are new to cryptocurrency exchange & trading platform then this beginners guide should help point you in all the right directions while making you aware of the many pitfalls that exist.

In this starter’s guide you’ll learn:

1) What is Cryptocurrency Exchange?
2) What is Bitcoin Exchange?
3) What is Bitcoin & Cryptocurrency Trading?
4) Difference Between Cryptocurrency Exchange & Trading
5) How Cryptocurrency Exchange and Trading Works?
6) Benefits of creating a cryptocurrency exchange platform?
7) Features of cryptocurrency exchange and trading
8) How to use Bitcoins?
9) How does Cryptocurrency make money?
10) How does Cryptocurrency exchange work?
11) What is a cryptocurrency wallet
12) How to Start Your Cryptocurrency Exchange Website?
13) What is Cryptocurrency Exchange Software?
14) Where Do Get Cryptocurrency Exchange Software?
15) Cryptocurrency Exchange and Trading Forecasting 2019

1. What is Cryptocurrency Exchange?

A cryptocurrency exchange or DCE (digital currency exchange) is an exchange where you can buy or sell cryptocurrencies or digital currencies like bitcoin, Ethereum, Lite coin etc. We can trade and using fiat currencies, or other digital currencies or digital assets. 

A typical cryptocurrency exchange works 24/7, that is, it never closes. One of the reasons people like them is their invisibility feature. Nobody knows who the buyers and sellers in cryptocurrency exchanges are.

In simple words: Cryptocurrency exchanges work just like traditional exchanges. On many of these platforms, cryptocurrency users(buyers & sellers) can make limit orders or market orders, and the brokering process works like it would for any other kind of asset. The cryptocurrency exchange helps with the online transaction and collects the fees. 

2. What Is A Bitcoin Exchange?

The main aim of a bitcoin exchange is trading. They provide traders with an opportunity to trade one bitcoin for another or for fiat currencies and vice versa. Additionally, they offer the services for storing your bitcoins or sending it to your digital bitcoin wallet. Exchanges usually charge fees for the services.

3. What is Bitcoin & Cryptocurrency Trading?

We all know that trading means buying and selling goods and services, the same goes with buying bitcoin and selling bitcoin is well known as bitcoin trading. As Bitcoin is the most top trading market right now, the Bitcoin traders are excitedly searching the best possible solution for trading and investing in bitcoins.

4.Difference Between Cryptocurrency Exchange & Trading

Bitcoin exchange & trading platform works with the same fundamental. The difference between bitcoin exchange & trading is:

* In bitcoin exchange, traders/users are able to exchange their bitcoin using fiat currencies or other digital currencies/assets. 
* In bitcoin trading - traders/users are able to buying & selling digital currencies only (fiat currencies are not allowed here).

5. How Cryptocurrency Exchange and Trading Works?

They allow exchanging one cryptocurrency for another, the buying and selling of coins, and the exchange of fiat money into the crypto platform.

Crypto exchanges fix the rate of the currencies — both coins and tokens. The cryptocurrency rate mostly depends on the actions of cryptocurrency traders(sellers and buyers), even if there are other factors that can affect the cryptocurrencies price.
Multiple cryptocurrencies exchanges may have different options and functions. Some of them are made for traders, while others are made for prompt crypto-fiat currency exchange. Cryptocurrency exchanges — that are designed for regular traders and it allows you to buy cryptocurrency and sell them with lower commission fees than on cryptocurrency-to-fiat currency exchanges. Also, trading platforms charge fees for withdrawing cash from the account.

Mostly, cryptocurrency exchanges work similarly to traditional stock exchanges. The difference is that, on a stock exchange, traders buy and sell assets — shares or derivatives — in order to profit from their changing rates, while on cryptocurrency exchanges, traders use cryptocurrency pairs to profit from the highly variable currency rates.

6.Benefits of creating a cryptocurrency exchange platform?

People investing in cryptocurrencies not only include persons trading them but also comprise of folks creating money by investing in cryptocurrency exchange platforms allowing folks to buy and sell cryptocurrencies. If you do not want to try at trading cryptocurrencies, but still want to jump on the cryptocurrency platform to make money, you can choose to create your own cryptocurrency exchange.

Let’s have some insights into the benefits of cryptocurrency.

* Simplified online transactions
* More confidential transactions
* Greater access to credit
* Individual ownership
* Strong security & More...

7.Features of cryptocurrency exchange and trading platform:

The majority of traders expect today's cryptocurrency exchanges to provide a few key features:

* Dynamic & profitable buy/sell order matching
* Secure cryptocurrency multi-signature wallet
* Two-factor authentication
* Efficient support ticket system
* Liquidity cryptocurrency exchange features
* Acceptable & secure system for transferring digital currencies to and from the exchange & more...

These key features allow buyers & sellers to feel safe and secure when using a cryptocurrency exchange platform, as well as helping them to trade cryptocurrencies instantly as soon as possible.

8. How to use Bitcoins?

In Simple words:

1. Download software to your computer or phone to setup a BTC wallet. This gives you the basic facilites to send, receive and store bitcoins.

2. Your software will generate a unique string of letters and numbers: Your bitcoin address. The address isn't tied to your name or any personal data, but it defines you to bitcoin network. Give this address to anyone who needs to pay you.

3. Buy bitcoins with a stabled offline currency, either from another user or through a dedicated bitcoin exchange. Your new digital currency or funds are added to your wallet.

4. The bitcoin network authenticates the transaction by recording them in the"blockchain"-the underlying code that preserves the integrity of the currency.

5. Use your software to send payments to other address. Divisions as small 100,000,000th of a bitcoin are the possible-a unit called a Satoshi'.After the currency' enigmatic inventor.

9. How does Cryptocurrency exchange work?

Cryptocurrency exchange is where traders(buyers & sellers) conduct their business. A seller of bitcoin deposits bitcoin with the exchange's address. The trader can use his positive Bitcoin balance in the exchange to sell his Bitcoin for fiat currencies or other coins. Similarly, a buyer of Bitcoin deposits dollar with the exchange & then he can use the balance to buy BTC from sellers.

Traditional or real exchanges are really just a medium between traders(buyer & seller). Folks can set limit orders to buy or sell BTC's for an assured price. The exchange will match buyers & sellers when conditions of both the traders(buyer & the seller) are met.

Basically, there are two types of orders: 

* Limit orders 
* Market orders 

Limit orders allow a trader to buy bitcoins at a price lower than the current price or sell bitcoins higher than the current price. However, these orders will only be executed once another user accepts them. Market orders will just find the best matching limit order.

10. How does Cryptocurrency make money?

You make money from money. Like many things else in business and trading, cryptocurrency will make you money if you know deeply like:

* The what
* The where 
* The when
* The how

The What: You need to choose which cryptocurrencies you want to put your money in. The money here is the legal tender of your township. There can be multiple ways to choose cryptocurrencies to invest in. Depending on your trading style, you can play a safe bet and invest in the most popular, stable cryptocurrencies platform (like Bitcoin, Ethereum etc.).

The Where: You need to find the best bitcoin exchange for you. The commission's fee charged the KYC process, the security, and the customer support are some of the advanced features which you may need to consider before picking the best bitcoin exchange platform for you. 

The When: You need to find out the best time to buy and the best time to sell. There can be various strategies to optimize this selection. 

* If you are a long-term trader, you may want to hold on to a regularly growing cryptocurrency for a long time and see the value increase right. 

* If you a short-term trader, you may want to choose a local minimum price to buy and a local maximum point to sell a bitcoin, and make capital benefits in the short run.

The How: You need to be accomplished with the cryptocurrency markets statics in all over the world or else your country. Follow high-quality resources, blogs, market analysis, and news. You should know what are all the latest technology behind cryptocurrencies (i.e., the blockchain & DEX) will be an added advantage. When you find yourself equipped with the trends, forecasts, and options, you are ready to enter in invest in the cryptocurrency world.

11. What is a Cryptocurrency Wallet

A cryptocurrency wallet is a secure digital wallet used to store, send, and receive cryptocurrency or digital currency. Most coins like bitcoin, Lite coin, Ethereum, and more coins have an official wallet or a few officially recommended third-party wallets. In order to use any cryptocurrency, you will need to use a cryptocurrency wallet.

TIP: You can store all ERC-20 tokens (tokens created on the Ethereum platform) in an ERC-20 friendly wallet. Many Ethereum-based tokens also have their own wallets as well (check the coin’s official website for official wallets).

12. How to Start a Bitcoin Exchange website?

In Simple Steps:

1. Have a proper legal counsel to establish licensing requirements 
2. Obtain funding for the venture.
3. Find the latest technology solution, provider.
4. Connect your bitcoin exchange with others for added liquidity.
5. Obtain Partner with a Payment Processor.
6. Implement High-end security practices.
7. Go live through beta testing.
8. Implement marketing Plans & PR campaigns.
9. Provide customer Services & Supports
10. Maintain a legal team for ongoing & future compliance.

Here you can get the clear idea about How to Start a Bitcoin Exchange website?

13. What is Cryptocurrency Exchange Software?

Cryptocurrency exchange software is a tool which enables exchange implementation and operation. To put it simply, developers build the cryptocurrency software using the script and this exchange software enables people to operate an exchange. Cryptocurrency exchange allows traders to exchange one cryptocurrency into another digital currency into fiat. 

You may look into most of the companies, which provide cryptocurrency exchange software solutions for cryptocurrency exchanges to have a better understanding of it.
Here is the example: Cryptocurrency Exchange Software

14. Where Do Get Cryptocurrency Exchange Software?

Today thousands of bitcoin exchange script providers are available in the market. But we don't know who are all build reliable and high secured bitcoin exchange platform from the scratch. 

So consider these 10 important factors before buying the cryptocurrency exchange script!

1. Proven Industry Experience or not?
2. Is the cryptocurrency exchange software prepared to fix bug-free development?
3. Is the cryptocurrency exchange software system customizable enough to meet your needs?
4. Is it can provide all the latest features and additional cryptocurrency business solutions?
5. Is it offers liquidity & volume?
6. Knowledge about cryptocurrency Exchange Business?
7. Robust, Security & agile development?
8. Is it affordable?
9. Top quality & best technical support?
10.Easy to use & user interface
11.Mobile Responsiveness
12.Content Management System
13.SEO Friendly & More...

About Pulsehyip: 

Pulsehyip is the best bitcoin exchange script development company in India and enables you to build a robust Bitcoin Exchange business Website with our ready-made bitcoin exchange script. With the help of experienced experts, we make the Bitcoin business software faster, more powerful, secured, flexible and easier to use. Cryptocurrency business enthusiastic can get the business script as software package which can be customized & designed with special features to meet your business requirements.

The Architecture Of A Bitcoin Exchange Software

Our exchange software should have different components & advanced features like:

1.Trade Engine
2.Advanced CMS
3.Integrated & Multi-Signature Wallet
4.Customized Admin Panel
5.AML Integration / KYC
6.Multiple Currency Pairing
7.Cryptocurrency Price Ticker API
8.P2P Exchange
9.Easy & Secure Transaction
10.Rest API & More additional features...

Pulsehyip provides various cryptocurrency & custom blockchain solutions for the startup! Just check out our all other solutions.

15.Cryptocurrency Exchange and Trading Forecasting 2019

Bitcoin has survived to be the top one cryptocurrency with the most potential for investors to make profits. It is the important one that you know the price of BTC in 2019 in order to extract maximum profit from the coin. Various business experts have given their assumption about the expected price of BTC in 2019. It is only cautioned that as investors, you take time to go through these opinions.

Anyway, what do you think the future of Bitcoin will be? Or If you wish to know more about the features of the Bitcoin exchange -> contact us to get a free consultation!

 

 

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