Bitcoin Forum

If you were going to build a new cryptocurrency exchange, how would you do it?

Would you use existing open source software such as Peatio, would you create a custom made platform, or would you try to use one of the existing decentralized exchange platforms?

Consider from a business perspective as well as a developer's perspective...  :)

Short answers for the questions above:

I would not ever use existing source codes.
Open source is tempting easy way to build something fast. However I always consider simple rule of thumb "If something is literally money-printing press, why it is free?" Even though I might not know what is wrong with the source, I don't want to waste time and money to find out. It can be anything from inability to handle loads to poor algorithmic or backdoors injected into it. I simply don't want to find out.


I would not try doing decentralized exchange.
I don't see how it is possible to create both scaleable and fast decentralized trading platform. I have been reading lots of suggestions and projects but they all are deeply flawed and crippled compared to professionaly made exchanges.

What would be my obvious focus? Customer support. I see even best players on the field mishandle or neglect customer support and public relations.

I don't hold most of the exchanges famous for lack of support (except a few) that accountable for it. A lot of them have just been hit with a massive influx of users that they weren't expecting.

Then there's Coinbase.

Thanks Colorblind :)

I agree that customer support on most major exchanges is pretty bad. Although I guess to be fair they've probably had huge increases in users in the past 12 months and are struggling to deal with that... Customer support in any business is essential.

I'm not so sure about not using Open source. I'm pretty sure Binance is based on Peatio (although no doubt heavily modified) and it seems to do OK :) I know there has been quite a bit of work done on the Peatio exchange recently by the Peatio.tech guys for their own use and that has no doubt improved it greatly as they're going to be using it for a major exchange I think.

The other things I think seem to be missing on existing exchanges: very few have fiat currency support (and instead use USDT which is on pretty shaky ground at the moment IMO), customer service as you mentioned, and also support for smaller coins. Cryptopia has lots of smaller coins but their customer support is terrible and their platform in general is not very nice to use.

Open Source is great if you have either expertise to assess and modify code or trustworthy professional team with such expertise.

Open source is a great way to build on the experience of others, though I would always build a custom solution to keep control of the final product.

A lot of people are doing exchanges for everything these days, including not only crypto, but also FOREX, metals, stocks, and other things. It is what is called "one-stop shop" for everything, which is quite useful.
Trade.io is an example of an exchange that will be everything included.

As someone who has done this in the past, I'd have to say you need a team, more than anything else. Even if you are the most skilled bitcoin, web front and back end developer in the world, you will still need a team to handle the day to day running of the thing.

Support requests are an utter nightmare.

On top of that you DO need to have cutting edge bitcoin security knowledge, or it will get hacked just when it gets off its feet enough so that people start taking notice, and then you'll be in some serious trouble.

You'll need to hire proper bitcoin pen-testing hackers on a regular basis to carry out white hat attacks on the site.

On top of that, you'll need to have top-notch back-end systems architecture guys on the project to handle scaling, as the adoption curve for these things is exponential, so if you have bad architecture, you'll be screwed because it won't scale.

To summarise, this is not a simple project, in fact, probably one of the most challenging projects you could possibly undertake.

There is a reason Poloniex just sold for $400M. It's not easy to do.

Cheers, Paul.

Thinking about what you just say here: without open source the bitcoin ecosystem wouldn’t even exist.
„Why is it free“ - because it can!
The egocentric, capitalistic, „free markets“ economic theories have all a poor and very limited understanding of (intrinsic or altruistic) reality. Open source brought so much to this world, that you would think, without it we would still live in caves.

The second part is way better: when handling money, you need to look into the code you‘ll be using. Rigorous testing is required, and a sound understanding, on how you want to secure your users money.
Putting yourself in a position of a customer, who gives money to an exchange, you want to be assured, that you deal with experts, and not newbies.

So open source can be a way to go, but must not. And it is not an assurance of well functioning code per se. But: anyone can help to make it - bitcoin is dealing with values in the billion Euros, and has proofed to be very, very stable against all sorts of attacks, even those trying to steal the name.

There is an "Open source" and there is an "open source". The first one, like Linux or Python or Bitcoin itself is great gift to the society. But there is a lot of code stuffed with greed, errors and other things. Dealing with open source often relates to the risk of stumbling upon something unexpected. My rule of thumb is never use opensource as a core for business logic. I.e. if the logic that suppose to earn me is opensourced it is kinda suspicious and I would expect it to be either bad or straightforward malicious. I.e. Using opensource as framework to develop upon would be okay for me, but using open source of trade engine would likely require more efforts to look into it then to create my own from scratch.

You can not be a one tree because one tree can not make up a forest,it will be nice you seek for more knowledgeable ones to help you build your exchange they will give you the best advice you will need to achieve your goals.

https://bitcointalk.org/index.php?topic=3030940.0

Please guys help me pleassssssssse

Thanks Monsterer... Some great advice there :)

I've said it before and will keep saying this again to anyone who wants to start an exchange: support is probably the single most important aspect of a service - and that's what an exchange really is at the heart of it: a service. I wouldn't say I have the best experience, but I ran an independent trader and exchange service for digital currencies over a decade ago, and I always made sure I never took on more than I or my staff could handle. The investment in recruiting and training support staff is often hugely underestimated.


Like you, I think open source is a great, great gift. The foundations of the Internet were open source, and so are the foundations of blockchain in Bitcoin. Of course, with these, they eventually benefited from so much peer review and testing (just look at the latest Core release, 5 months of hard work with over a hundred developers and contributors) that could only be possible with open source code.

Nothing wrong with taking what works and expanding on it. But I think people shouldn't mistake open source for "fully functional and ready to use".

Well i believe there are many reasons to exchange, to see the best thing or advice to achieve your goals in life, so you can build exchange if that your decission to yourself that you can see a best advice to achieve your goals.

Creating an exchange is not easy you not only need a huge amount of money but you need a strong background on security if you do not then you will risk the future of the exchange and the funds of your customers, with that being said, the only real option is to develop your own platform from zero, you may take inspiration from open source but you need to build it yourself after all if there are any bugs found in the open source software you will vulnerable.

Open source are not bad IMO, but you need a a strong development team to enhance the codes and to implement more security features. Building exchanges are pretty tough, there are so many cases of hacked exchanges since bitcoin got a value in USD so security is a must and of course like what others just said, customer support is one of the aspects of good exchange.

I would invest a great deal more than what existing exchanges have invested into human resources for support. If support is responsive and can actively solve issues, then they can literally do anything. Most exchanges start out well with the admin directly handling support tickets which means that it's efficient. Then after it grows, admins seem to abandon the support and outsource it to people who have less of a knowledge of how an exchange is run, as well as less rights to actually conduct something.

The design and actual functionality of the site in my honest opinion will come secondly only if support is established.

This is why yobit has so many pairings, and nobody uses them except for newbies or pump and dumpers. It's also why even though poloniex's design and interface has stayed the same but they've lost a great deal of customers - due to support issues.

I'll simply hire a group of developers who will start coding and everything including security, front end and as well as the back end.

I won't use those open source software, I want to make my exchange safe so I'll purchase my own license to a well trusted source. I won't go for a decentralized platform.

Looking to my business perspective and about developers perspective, I'll decide for myself but will ask some advice from my devs.

You need a custom made platform. Bitfinex tried to use defunct code from another platform and they keep getting hacked.

You'd need a huge team of coders to create a bespoke platform, you need MySQL experts to handle the database, you need cryptocurrency experts to handle wallet management and maintenance, you need a team of lawyers to handle the legal aspect and business managers to handle customer support.

The days of someone simply setting up their own exchange ended back in 2013, when the number of customers, coins, walets and legal requirements and regulations started to mushroom.

If I'm to build a crypto exchange. I think the Peatio is good because it free, MIT license, it has received 467 stars and 188 forks on it's github page but you need to do something to secure the customer account/fund when using it and this link will help you to do figure out how  secure customer from theft (https://medium.com/@benedictchan/building-the-world-s-first-open-source-multi-sig-bitcoin-exchange-a6f1221eff46).

Your merit are welcome if you find my post helpful :)

Peatio was a meaningful open source crypto currency exchange asset and I went through the link you posted and it was really helpful :)

I will go for WLOX Crypto Capital because it is the only one which was integrated with a licensed by financial institution, Crypto Capital. However, it is good for instant deposit and withdraw of fiat funds from user private bank account provided by Crypto Capital and it supported 30 different fiat currencies if I'm correct.
With WLOX all you need to do is just manage the software, marketing and provide support to your customers.

Build your decentralized cryptocurrency exchange platform with the ready-made decentralized cryptocurrency exchange script.

Kindly check this thread to get a good idea: https://bitcointalk.org/index.php?topic=5006532.new#new (https://bitcointalk.org/index.php?topic=5006532.new#new)