The Evolution, Risks and Benefits of a Crypto Trading Platform

30 Jul

CRYPTOCURRENCY TRADING PLATFORM

A cryptocurrency trading platform is a digital exchange network which is built on the decentralized working of the blockchain technology. A cryptocurrency exchange is a business that allows users to trade digital currencies for other assets, such as our everyday fiat money like the Dollar or other digital currencies. The exchange typically makes its own profit by taking a bit-size of every transaction processed on the platform as fees.

Again, a cryptocurrency trading platform is a website where one can buy, sell or exchange cryptocurrencies for other Cryptocurrencies or conventional currency like Euro. To trade professionally and to have access to fancy trading tools, depending on the preferred exchange platform chosen one will likely need to use an exchange that requires verification of ID and compulsorily open an account, a process in which a prospective user submits necessary data about himself. For occasional traders, there are some platforms that can be used which require no little or no information about the user. It is important to note that digital asset exchange platform is usually independent of the Cryptocurrencies trading on their platform. Though some platform disowns their own cryptocurrency it is always different from the exchange platform business.

HOW CRYPTOCURRENCY TRADING PLATFORM WORKS

A crypto exchange is a similitude of the conventional business environment's stock market. While a stock market allow investors to buy and sell stocks of listed companies in order to make profit. Cryptocurrency exchange platform allow sales, purchase, and exchange of a digital asset for another.

What each digital asset exchange companies do is to create the most friendly environment via their platform that can make buying, selling and exchange seamless. Crypto exchange offers users convenient ways to transact with their financial instruments as well as provides them with the freedom to execute transaction on their own terms. The high rates of development in the cryptocurrency exchange business based on blockchains ensure continuous improvement in exchange technologies. This means that in an attempt to market for new customers and provide current users with the most convenient conditions, each crypto exchange will continually raise the bar for a new level of service.

The digital currency exchange basically operate outside the Western financial laws to avoid regulation and prosecution. However, they sometimes handle fiat currencies and maintain commercial bank accounts in several countries to facilitate deposits for users in their various national currencies. Digital exchanges may accept credit card, wire transfers or other forms of payment in exchange for Cryptocurrencies or digital currencies. As of 2018, cryptocurrency and digital exchange laws in many developed countries remains unclear as conventional regulators are still considering how to deal with these types of businesses due to its decentralized workings.Though there are more factors that determines the price of a cryptocurrency, the flow demand and supply usually takes a big portion of the pie.

HISTORY OF CRYPTOCURRENCY TRADING EXCHANGE

The first cryptocurrency exchange platform wasn't Binance or CoinBase or any of the now popular exchange and trading platform. The first trade zone which traded bitcoin as the first and most popular digital asset then was a now defunctional bitcoinmarket.com. The website was first heard off from a bitcointalk platform by "dwDollar" in 2010, Jan 15. In his words he said " I am trying to create a market where Bitcoins are treated as a commodity. People will be able to trade Bitcoins for dollars and speculate on the value. In theory, this will establish a real-time exchange rate so we all will have a clue what the current value of a Bitcoin is, compared to a dollar." Ever since then, exchange services for bitcoin and other Cryptocurrencies have been rising up and some already closing down in less than a decade.

In 2004 about three digital currency exchange businesses based in Australia shut down voluntarily after an investigation by the Australian Securities and Investments Commission (ASIC). ASIC viewed their services as legally requiring an Australian Financial Services License, which the companies do not have.

By February 2014, Mt. Gox, which was the largest cryptocurrency exchange at the time, suspended trading activities, closed its platform and exchange service. They then filed for a chapter 11 protection in Japan from creditors. In April 2014, the company began its liquidation process. This was as a result of a large theft of cryptocurrency -Bitcoin that was missing straight out of the Mt. Gox hot wallet over a long period of time, beginning in late 2011.

Over this period, digital asset exchange service platforms have developed tough skins even as some keep winding down. The major problem is that the structure around the blockchain cryptocurrency service is not well built, yet.

RISKS AND BENEFITS OF A CRYPTOCURRENCY TRADING PLATFORM

Cryptocurrency based application development is not an easy task. A whole lot of factors must be put into consideration to get it right. It is a business that requires defining clear objectives for creating the platform and which are the target markets. This is because the market is already in a saturated ray already and therefore any developer coming must do so after having to see a problem or better technology which could make participants in the cryptosphere perform their varying degrees of operations seamlessly.

It is usually best to make use of a cryptocurrency consulting company which is already in the game to guide in the process of setting up a digital exchange service or even as users who want to invest heavily. They'd need the best form of advice and guidance to make the best of decisions in their developing and investment journey respectively. Also, since all assets are digital, any asset that is owned by an investor can easily be wiped out without a streak of trace available in the case of any web-related issues that might arise.

Out of the many benefits of a crypto trading platform, the ease of transaction across the border without the need for the bureaucratic process of the commercial banks and other middlemen services. The ability to meet financial obligations on a decentralized mode of operations free of chains of regulations and unnecessary laws. However, it might get to a point where regulations might be needed not because it can't work without one but to guard against the negative effect of freedom, which Blockchain's decentralization gives the cryptocurrency-based services.

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