Thinking of making my own altcoin exchange... Need tips and advice!

[Mt. Gox]

Hi, I'm thinking of building my own altcoin exchange similar to Cryptsy but I need some advice first.

I took a semester of Python and a semester of Java back in college two years ago, both of which I passed (the former with an A grade). I also have some experience with HTML and some minor experience with CSS.

Now I understand that an exchange would utilize scripts and dynamically generate pages with a front end and a back end. And I will need to learn PHP (or perhaps use my existing knowledge of Python?) to code for all the programming in the back end and use MySQL to keep entries in a database.

So I'm guessing the basic script will generate a new deposit address for coin A and assign it to each user. Each user will be an object that is an instance of class "User" that will have its own attributes. When coins are deposited into the address, the script updates the user's balance and stores this in a database somewhere. If the user wants to exchange his coin A for another coin B, a method call is performed which deducts the chosen amount from the coin A balance and updates the coin B balance. The same would happen to the other user on the opposite side of the trade.

Sounds pretty easy.

I also realize that I could hire a developer who could make the site for me, but I don't really want to do down this path because if they are a good developer, then they can build their own altcoin exchange themselves. Why would someone choose to do all the work for me? Not to mention it would be expensive and it would be very bad if I, the owner, did not understand the code and had no idea how anything worked.

OK, so far so good. Now what about the economics? Exactly how profitable are exchanges? What are the expenses (other than hosting costs), that impact the profitability of an exchange? My plan for my business is that it will be a one-man operation to keep costs low. And how long would it take for someone like me who has no knowledge of PHP to gain the necessary skills to pursue this plan?

Thanks.

[TheWhale]

Not with that username 

[Mt. Gox]

Not with that username 

It will have a completely different name and will be launched on a new account. I already registered the domain for it although it's a secret. Launch is set on Jan 1, 2015. And who knows? If it becomes extremely popular then I might even be able to buy the trademark off Karpeles and call it Mt. Gox 2.

[TheWhale]

Not with that username 

It will have a completely different name and will be launched on a new account. I already registered the domain for it although it's a secret. Launch is set on Jan 1, 2015. And who knows? If it becomes extremely popular then I might even be able to buy the trademark off Karpeles and call it Mt. Gox 2.

Lol. Have you considered buying an alt exchange? I think it would save you some money. Look in the Auctions section of bitcointalk

[Mt. Gox]

Not with that username 

It will have a completely different name and will be launched on a new account. I already registered the domain for it although it's a secret. Launch is set on Jan 1, 2015. And who knows? If it becomes extremely popular then I might even be able to buy the trademark off Karpeles and call it Mt. Gox 2.

Lol. Have you considered buying an alt exchange? I think it would save you some money. Look in the Auctions section of bitcointalk

I could, but those are very expensive. The last one went for 15 BTC apparently. I only have 0.3 BTC.

[PereguineBerty]

Gotta admire your ambition buddy but creating and running exchange will be hell. You'll be under attack constantly from hackers and scammers running every exploit possible to steal your coins. You could put in months of work and see it go to ruin very quickly.

Good luck 

[MisO69]

Not with that username 

It will have a completely different name and will be launched on a new account. I already registered the domain for it although it's a secret. Launch is set on Jan 1, 2015. And who knows? If it becomes extremely popular then I might even be able to buy the trademark off Karpeles and call it Mt. Gox 2.

Lol. Have you considered buying an alt exchange? I think it would save you some money. Look in the Auctions section of bitcointalk

I could, but those are very expensive. The last one went for 15 BTC apparently. I only have 0.3 BTC.

Well.. you'll need hosting and a server. I think that alone will cost way more than .3

[cryptozim]

Gotta admire your ambition buddy but creating and running exchange will be hell. You'll be under attack constantly from hackers and scammers running every exploit possible to steal your coins. You could put in months of work and see it go to ruin very quickly.

Good luck 

I agree with this. If you only have two semesters of programming experience, you're nowhere near ready to deal with the security issues that come with holding large amounts of coin for other people.

[raganius]

Not with that username 

lol

[CounterStrike]

Dont do it unless you have a team of people, you will need to monitor it 24/7 as the hacker loves exchange site..

[boxuser]

no need for that, see

ANN: https://bitcointalk.org/index.php?topic=634403.0

Video to upcoming Wallet 2.0 with Dec. Exchange in wallet: http://vimeo.com/100148381

Hi, I'm thinking of building my own altcoin exchange similar to Cryptsy but I need some advice first.

I took a semester of Python and a semester of Java back in college two years ago, both of which I passed (the former with an A grade). I also have some experience with HTML and some minor experience with CSS.

Now I understand that an exchange would utilize scripts and dynamically generate pages with a front end and a back end. And I will need to learn PHP (or perhaps use my existing knowledge of Python?) to code for all the programming in the back end and use MySQL to keep entries in a database.

So I'm guessing the basic script will generate a new deposit address for coin A and assign it to each user. Each user will be an object that is an instance of class "User" that will have its own attributes. When coins are deposited into the address, the script updates the user's balance and stores this in a database somewhere. If the user wants to exchange his coin A for another coin B, a method call is performed which deducts the chosen amount from the coin A balance and updates the coin B balance. The same would happen to the other user on the opposite side of the trade.

Sounds pretty easy.

I also realize that I could hire a developer who could make the site for me, but I don't really want to do down this path because if they are a good developer, then they can build their own altcoin exchange themselves. Why would someone choose to do all the work for me? Not to mention it would be expensive and it would be very bad if I, the owner, did not understand the code and had no idea how anything worked.

OK, so far so good. Now what about the economics? Exactly how profitable are exchanges? What are the expenses (other than hosting costs), that impact the profitability of an exchange? My plan for my business is that it will be a one-man operation to keep costs low. And how long would it take for someone like me who has no knowledge of PHP to gain the necessary skills to pursue this plan?

Thanks.

[1Referee]

If you need advice and tips regarding making/managing your own exchange should be an indication that you're not able to do so.

Don't get me wrong, I like to see people getting involved in new projects, but running an exchange requires a whole team. It will cost you a bunch of $$$ as well for marketing.

Competing with the current large altcoin exchanges is a battle that you can't win.

And then the most important thing. Security.

[Spoetnik]

Love the name  

i just wanted to say i seen a banner add here at the forum saying you can buy one.. pre-made.


edit:
But in all seriousness it can't be done unless you have a professional team.

The days of running a one man half ass operation and it being good enough to get by is LONG gone !
Crypto is a money pit and it attracts the elite of evil from around the globe..
You can't just wake up tomorrow and say i will learn HTML/PHP etc and open an exchange next week lol

[ethought]

And how long would it take for someone like me who has no knowledge of PHP to gain the necessary skills to pursue this plan?

Years...