I'm working on a small project for a while now and I still can't get my head around this topic. In my project users would have an internal balance for bitcoin and some other altcoins. They would be given a unique deposit address during registration and they would be able to deposit any amount of currency at any given moment, which would appear in their internal balance after 6 confirmations. They would also be able to enter their own address and withdraw funds. The same kind of system every cryptocurrency exchange has in place. I genuinely can not find any info on the internet on how to implement these systems, every single payment processor is invoice based.

It's pretty possible to implement something like this by yourself with the official Bitcoin Core and Full Node Softwares for bitcoin's clones, like litecoin and dogecoin. There has to be a mechanism in place that would be catching transactions on the network. However, I'm concerned about bitcoin core's walletnotify. I was told it creates a lot of memory problems for the machine. ZMQ, on the other hand, catches all the transactions, even the irrelevant ones.

So how do all of these cryptocurrency exchanges operate? Do they simply write these wrappers around the node software that collects needed data and saves in the database? Some of them have hundreds of coins! Do they have an instance of every coin running on their servers and separate software around these instances? Is there a common name for such payment processing? Is there any more information that I can look at?