To decide which cryptocurrency exchange software is best for your crypto exchange business, you need to know some things. It’s important to understand where the cryptocurrency markets are now and what the future holds for them.
At its inception, cryptocurrency was dismissed by many mainstream banks and financial institutions. But the tide is turning. In what has been a tough trading year for businesses worldwide, the cryptocurrency exchange has been a surprising anomaly.
The market situation
Coronavirus hit traditional markets hard in 2020 but, after a dip in March, cryptocurrency markets have rallied to their record highs from 2017. This boom has been supported by major companies such as Facebook, PayPal, and JP Morgan getting in on the cryptocurrency action – helping create a global market capitalization of over $560 billion.
With traditional markets still facing uncertainty and the big boys increasingly embracing cryptocurrency, 2021 looks set to see further growth in the industry. The impact of central investment banks and other global giants dipping their toes in the cryptocurrency waters is that most countries now have regulated fiat-to-crypto exchanges.
The crypto exchanges business
The above result is increased demand for crypto exchange across the planet, accentuated by pressure on global economies coming under pressure and a changing attitude to cryptocurrency. Its reputation is further enhanced with each corporation that jumps on board. All the indications are that 2021 will see another surge in demand for cryptocurrency exchange software.
When selecting a cryptocurrency exchange platform, your decision is between an on-premise or white label solution. Before we go into the merits and disadvantages of each, let’s first of all clear up what each is:
- On-premise crypto exchange – As its name suggests, this is a cryptocurrency exchange platform self-hosted and managed in-house by the company.
- White-label crypto exchange – This is a crypto exchange platform hosted and managed by a third party technical provider while your company focuses on business development, marketing, and customer support.
Pros and cons of on-premise crypto exchange software
An on-premise crypto exchange platform gives you both control and responsibility. You develop or buy the crypto exchange software, which can be customized to suit your requirements, and you own it. It is a company asset on your books.
You have the capacity and license to amend, add or remove features as you decide. If you wish to integrate a feature or a service, you can do it on a whim. You are limited only by your budget and your imagination.
But you are also responsible for managing and maintaining the software. If you don’t have the time or knowledge to do that yourself, you will need to pay somebody else to do it for you. That might be an employee who manages your software full time, or you can outsource it. In either case, you need to factor the costs into your decision.
As with all things, there are varying quality levels when it comes to on-premise cryptocurrency exchange software. The more expensive packages are quicker and more powerful but include a greater array of features. Front-end and back-end customization are possible, and you can adapt the admin panel too. You can change the language settings and improve UX with social elements such as leader boards or ranking systems.
The time to market will vary depending on your software of choice, but you have a range of cloud hosting options to choose from and can adapt the package to reflect changes in your business. Some business owners buy a product from the cheaper end of the range and scale it up as their company grows.
The ability to quickly adapt and mold your crypto software platform to suit your needs is one of the key benefits of on-premise crypto exchange platforms.
Pros and cons of white-label crypto exchange software
White-label crypto platform solutions are the simplest of the two in many ways. To get started, you simply register and pay the deployment fees. Within weeks, you have access to off-the-shelf crypto exchange software that bears your company logo and is, to the end-user, your platform.
In exchange for a subscription fee, your technical service provider will manage the platform software and bears responsibility for maintaining it and fixing any issues. Their business relies on them providing a reliable package, so there should be few issues. When technical problems arise, you expect them to be fixed relatively quickly since you are most likely not their only customer.
There are usually a few platforms to choose from, and you can select the one most appropriate for your business and then upgrade or downgrade as required.
Most white-label cryptocurrency platforms come integrated with selected third-party services that work with your provider. That means you are limited to the services and features available to the provider and have no autonomy to use other third party services. You are also bound by their pricing structure and cannot shop around for the best deal on any particular third party service you want to offer to your customers.
One of the downsides to a white label cryptocurrency platform is that you do not own the software. It is not a company asset and comes as an expense. It might prevent you from accessing crypto exchange markets in jurisdictions that insist that you own and are responsible for your software.
Front-end customization is relatively straightforward, but back-end customization is not. You will pay a monthly fee to your provider for their services, and they usually take a share of the revenue from each platform trading transaction. Customization can be expensive, as well as integrating extra coins and services.
Most white label providers will charge an hourly rate to complete these tasks, reflecting their monopoly on that market as you have no alternatives. White label packages are less time-consuming for you to manage and can be cheaper than employing somebody to manage your software full-time.
But you lack control and are unable to impact its performance directly. Scaling up is also affected as, once again, you are restricted by what is available and may find that the developments you want are not possible.
Ultimately, the choice between having someone manage the crypto exchange IT solution for you or host it by yourself depends on how quickly you want to start and how big you plan to grow.
If you have a brilliant marketing idea but no experience in Fintech cloud hosting and no technical team to back you up, white-label is your saving grace to start quickly and focus on business development. Keep in mind that your crypto exchange platform will probably not offer anything inventive to the public, and you are relying solely on your marketing to attract customers.
If you plan to cover significant crypto playgrounds and compete with the giants or require an innovative technical solution to offer a brand-new service and create your crypto markets like the Yellow Blockchain project, think about an on-premise solution with the source code ownership, like the one Openware offers.
You will have to hire and train your technical team, but you will offer unique services to the customers, not available to any of your white-label competition.
Thank you for reading, and good luck with your choice of the crypto exchange platform! Come back for more crypto business development articles, and make sure to leave your comments to share your experience with the Blockchain community.