How can I become a bitcoin exchange?
Edward As famed investor Peter Lynch said, "During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue-jeans made a nice profit." In the gold rush that is the cryptocurrency boom, one might compare the manufacturer of picks and shovels to the owners and operators of Bitcoin ou're looking to start up your own Bitcoin exchange
business, this step by step guide will point you in the right direction.
Now that you have seen the steps necessary to start your own crypto exchange, let's examine them in more detail.
1. Obtain legal counsel to ensure licensing requirements are met.
Before you set your plan into action, it is important to seek legal counsel to understand the regulatory demands of your new venture. Proper licensing will need to be obtained in all jurisdictions in which the company plans to operate. In many places, cryptocurrency exchanges operate without significant oversight, as government and regulation have not yet caught up with technology, while in other places including the US, Bitcoin operators must be licensed Money Transmitter businesses and must follow SEC and CFTC rules and regulations among others.
Attain funding for venture.
Before starting on your project, you should know the approximate costs involved.One major mistake made by startups is that they fail to plan for the future, landing small initial raises which may cover the costs of the development but will leave the venture without the critical operational cash necessary until it becomes profitable. Startups also often make the mistake of licensing from unscrupulous Bitcoin exchange providers that charge ongoing fees and fail to mention the legal obligations and costs required for setting up and maintaining an exchange.
Find a technology solution provider.
Modulus provides turnkey custom cryptocurrency exchanges, charging a one-time license fee without royalties or commission structures. This means there are absolutely no ongoing fees, clients can host the Bitcoin exchange themselves and clients receive full source code, which is important for auditing purposes, as some regulators request to inspect the source code.
Connect your exchange with others for added liquidity.
The cornerstone of any successful exchange is liquidity. Without an order book and trading activity, potential customers will view your new venture with skepticism. In order to bypass these issues, without facing the need to simulate activity via dummy accounts within the new exchange, we can connect your exchange into a network of existing exchanges, enhancing its liquidity. Remember, the larger the network of exchanges, the less liquidity will be an issue for your new exchange.