Since the advent of cryptocurrencies and blockchain technology, there has been a paradigm shift in the world’s financial ecosystem. Without much ado, let me quickly share a little backstory about my sojourn into the crypto space so that you know where my advice is coming from.
I have always had it in mind to invest, starting from the traditional markets, but my investment attempts fell short. While the crypto ecosystem is vast, I have learned to navigate and survive there since I started a crypto business. The moment Bitcoin hit the market, I started researching to gain more knowledge about the asset.
I love game theory and statistics, which informed my decision to invest in Bitcoin. Through small plays and craftiness, I was able to increase my portfolio.
However, I didn’t know some issues back then and couldn’t foresee the possible consequences, hurting my crypto business down the line.
That’s why I am here to share my experiences. Hopefully, these eight pieces of advice will help you kickstart a successful crypto exchange business in the ever-growing crypto world. If I had prevented these mistakes, my journey into the crypto world would have been smoother.
Sounds good, right? Then let’s dive in!
#1. Regulation is important.
The first thing you need to keep in mind before starting a crypto exchange business is regulation.
If you get it wrong with
- the country of your company incorporation;
- government licensing for crypto activities in the chosen country;
- your company’s bank locale and quirks;
- the hosting location of your online services;
Your prospects will not trust your business, and they would leave your business for your competitors who are duly regulated.
So, to register your crypto business, pick the country of incorporation carefully, and move from there. Once you have all the required documents in terms of regulation, people from all over the world would trust your business more.
#2. Offer unique services.
A widespread mistake that so many crypto enthusiasts out there make. They copy-paste another crypto business’ ideology. This plan doesn’t seem right. Remember, the crypto ecosystem is highly competitive – the last thing you would want to do is offer existing services. To attract more customers to your crypto business, you must provide unique products or services, and these products or services must be highly competitive.
#3. Gateway to fiat (real money) is a must.
I know you’re looking at Binance and wonder, “Hey, they can do it without fiat integration; why can’t I?”. Please take a closer look at the present crypto exchange space. I am sure you won’t find an exchange that doesn’t have a gateway to convert coins to fiat currencies. Try to avoid the troubles of setting up a crypto exchange business without a possible gateway, at least in the nearest future.
#4. Technology is only 30% of success. 70% is business development and marketing.
Are you looking to start a crypto exchange business anytime soon? Then keep it at the back of your mind that technology is only 30%, while business development and marketing take up the remaining 70%. The right technology is essential, of course, but you can solve it in many ways, like an open-source crypto exchange software platform.
Therefore, as you leverage the blockchain technology gains, deploy appropriate resources to fund your development and marketing efforts.
And that leads us to the next point below.
#5. Liquidity is a top problem to solve.
Your crypto exchange lives and dies by the speed it can allow customers to buy and sell crypto. This speed is what liquidity means. Accessing proper crypto market-making and liquidity to solve these needs and scale your business is a top problem even in other business niches.
#6. It’s a team effort.
To set up a successful crypto exchange business, you need to pick the right team to back you up. As a general rule, any financial business project should consist of a Chief Executive Officer (CEO), Chief Technical Officer (CTO), Chief Financial Officer (CFO), as well as a dedicated member of staff that would be in charge of identity verification (KYC). It will also help a lot if these officers have a track record of growing a project from idea to release.
#7. You shouldn’t start development from scratch.
Another regret that I have was starting the platform development from scratch. You may end up stuck in a lengthy and exhausting development cycle, bleeding your capital while the market evolves.
As a beginner, you should use turnkey or a customizable platform from a blockchain software development company. Developing your business from an elevated position allows you to start faster and grow your business till it reaches a viable height.
#8. Start with the MVP (Minimum Viable Product) and grow from it.
The last but not the least common mistake is not starting with the minimum viable product as soon as it’s ready. Remember, only serious companies with adequate funding can afford to tweak and tune their software “until it’s ready” (yes, I am looking at you, Cyberpunk 2077).
I wish I knew companies were providing ready to install open-source
Still in doubt, where to start?
Well, for one, Openware’s Opendax is a viable open-source customizable platform that you can take advantage of. Instead of starting your crypto exchange business from scratch, you can count on Openware for the required legwork to launch the technical side of a successful business.
What’s your experience with setting up a crypto exchange business? Let us know in the comments below.