Bitcoin Forum

I am not computer savvy in regards to programming or setting up servers etc. If one were to buy all the equipment and software, hardware etc? How much would something like this cost to set up a Bitcoin exchange better than Mt Gox?

Servers are the least expensive things as usual. A rough estimate for a serious exchange could look like this:

Software development or purchase of out-of-the box product + customization: 100k-200k USD
Servers: around 20k USD should be enough + Xk USD that you want to spend on DDOS protection, X can be as large as you want and still won't give you 100% DDOS resistance.
Initial legal costs: 10K USD-100K USD (heavily depends on jurisdiction)

It's less about how much money it takes, the biggest issue is gaining trust.

Thanks for your input.
Could you elaborate on the software?

Doubtful because its not exactly like windows where you can walk into walmart and grab it, it has to be made from scratch. So as for 'software' its what ever your team designs.

200k to startup? Doubtful. A single programmer, and a web security guy could get the job done waaaay cheaper than 200k.

Initial legal costs, I would not worry about this until you're making some money, they're not going to kick your doors in to fast.


Really all these exchanges do is record what you deposit, and give you fake coins to trade around, while the stash is in cold storage. I cant see that taking to much time if you know what you're doing.

 :'(

what bitcoin-related startups need least is fiat money.

to OP: if you cannot develop by yourself, then don't try a bitcoin-related startup, because by doing so you give others opportunities to cheat you. Don't testing people.

^^^ This right here, why would someone accept a few thousand bucks, when someone with the intelligence to make the exchange can see mtgox making 250k a day?


Look at facebook.

Some others posted it would cost a lot less to create an exchange. I do agree with Lexxus as if you are trying to do a completely legitimate site, it will cost in the ballpark of what he mentioned above. The main reason is you will want a few developers and engineers to create a Rock Solid secure site. Not to mention security consultants to ensure this.

Legal is also a big  + as you want to be able to protect yourself in case you did get hacked and lost everyones Money/BTC. You definitely do not want to be arrested because  you create a piss poor service in your basement by yourself and are legally obligated to pay everyone back or go to jail.

For example, Im a linux engineer and I could build a Poker Stars clone if I *really* wanted to by myself in my basement if I spent enough time on it. However, if you did not want everyone to hack and slash you, you would need severe Legal and Security teams which cost an arm and a leg to ensure you don't

Second example:

Im from the New York Area and if you took some basic formula you can figure this out to a rough estimate:

1 - Good developers in NYC get around $100,000. Take this number, Divide by number of months the project is expected and times by How many developers needed ( I would say minimum is two)

2 - Good Linux System Engineers in NYC also get minimum $115,000. Divide by number of months the project is expected and times by How many Engineers needed (I would say two)

If you expect a project to take 3 months (I think that is conservative) then your costs are 100000/3*2 (salary/timeline*developers) = 66,666 + 115000/3*2 (salary/timeline*engineers) = 76666 = total for engineers and developers 143,000 IN just developers / engineers.

You can find cheaper Dev elsewhere, but if you go for top notch talent, its either San Francisco or NYC which are both in the same Salary ballpark

kosta

Basically you can do 3 things:

1. Develop form the scratch. Cons: very expensive, requires really good developers (thus again very expensive), time consuming, risky (the project can fail due to inadequate architecture, developers may quit, etc.). Pros: you can implement whatever features you like.

2. Take something opensource like https://github.com/buttercoin/buttercoin and try to build on top of it. Cons: you are constrained by the design of the initial project, you still need good developers. Pros: less expensive, less risky.

3. Talk to Forex brokerage solution providers, explain them your requirements, get a quote for the licenses and the customization. It will be expensive again, but you can be sure (to some extent) that it is done right.

Note that you need in-house developer anyway. In 1 and 2 you need at least 3-4 developers to handle server side, backoffice, web client, desktop client, security, testing etc.

Thanks for all the input guys. I appreciate it. :)

Checkout http://bex.io/ (http://bex.io/) . They make bitcoin exchanges.




Tips welcome if this information was of use.