- First and foremost is to understand that Africa’s ecosystem differs significantly from the way of things in other continents
- Technical knowledge and budgeting build a roadmap in knowing the kind of crypto exchange you desire to start
- Legalities surrounding starting a crypto exchange are the most crucial and cumbersome aspect since it varies between African countries
The crypto market in Africa is a vast ocean of lucrative possibilities. Many developers have invaded the continent and tried blockchain development to create their crypto. However, the development has proved that it needs more research to capture the market successfully. Instead of creating the product, they eventually turned to African blockchain startups that would facilitate and support the trading volume within Africa. It involved building a crypto website and application where traders can deposit their funds to trade. Although how does one end up starting their crypto exchange company in Africa?
The answer is relatively easy, and here are guidelines that are curial to anyone willing to make an effort to establish their crypto exchange platform just like others within Africa. This step guide provides insight into where to start and where to head after each stage.
Starting a crypto exchange platform in Africa
Step 1: Understanding a country’s market flow
The global crypto market has rapidly grown over the years, and many exchanges have hit the $1 billion mark in terms of trade, and the numbers consistently keep growing. However, it is crucial to understand that despite the luxurious temptations it comes to gaining technical know-how and building a crypto market, you must understand where your market is.
Also, Read the University of Namibia offers an MSc in blockchain technology.
For any business to succeed, it must first look at its local surroundings. The African crypto market is one of the first crucial aspects of understanding this. Its trading volumes may be outstanding, but unfortunately, that is due to a select few countries striving to dominate Africa’s crypto market.Most African blockchain startups are aware of their target market. To start your crypto market, noticing the trading volumes within your country allows you to scope the possibilities that lay before you. In Kenya, Nigeria and South Africa, crypto trading volumes are outstanding.
Africa has numerous milestones that hinder its overall crypto adoption rate, and determining how you can assist is another crucial product of analyzing a country’s crypto market. In the end of its finding, making it easier and accessible for individuals to access the crypto market is crucial to starting your crypto exchange platform. A prime example is the Machankura project.
Most innovators and entrepreneurs run to build their crypto website, forgetting that in Africa, various reasons essentially never heard of the term the Internet. This is a bitter reality, but the Mchankura and Bitcoin wallet merge solved this dilemma. They merely made an African blockchain startup capitalize on the offline community of Africa by bringing crypto capabilities through USSD. This incorporates the majority of users in Africa who lack access to the crypto market.
Understanding your country’s crypto market sets the pace of your plan to start your crypto exchange platform. This is Africa. We cannot apply the same concept of the global crypto market to our own.
Starting your crypto exchange platform Step 2: Type
Most newbie crypto traders need to understand that there are four significant types of crypto exchange platforms. Most crypto traders often think that it’s merely building a crypto website or applications. Unfortunately, this misconception results from the dominance of one franchise sector. They understand the type of crypto exchange you desire to start and also assist in understanding the budgeting, the legal actions, and the technical bit required when building up your industry.
The crypto market mainly consists of four kinds of crypto exchange platforms;
Centralized exchanges, or CEX, require users to deposit digital assets to trade on them. A CEX will require you to build a crypto website starting your crypto exchange platform since it ensures reachability and scales much better. Most African blockchain startup are built in this manner.
The operator provides a platform where users can buy, sell and store cryptocurrencies while they earn a commission for offering such services. This approach will require a hefty technical budget and prioritizing any legal documentation since you will be in charge of all your user’s funds. Any shady business conducted with their funds will lead to dire consequences. Take how FTX fell from grace.
These platforms utilize blockchain technology to facilitate cryptocurrency trading. They do not require any third party to receive, store and control customers’ funding. This kind of crypto exchange invites plenty of legalities. Unfortunately, it has a higher technical budget to incorporate and ensure the optimum functionality of blockchain technology. In addition, African blockchain startups take these roots to have freedom from direct affiliation to one organization. This exponentially broadens the scope of applicability, and it is optional to build a crypto website. However, this is your path if you are interested in making your crypto coin while facilitating its trading. Many African blockchain startup have avoided this path.
This crypto exchange is typical among African blockchain startups such as Yellowcard or Bitsika. It allows buyers and sellers to connect directly through an online platform. It is also a lucrative choice to take advantage of Africa’s crypto market. Sellers set their prices for products or services, and buyers pay sellers directly. You merely receive a commission. More often than not, when you want to start your crypto exchange platform, P2P exchanges are the most straightforward route out of the four since it requires less technical work.
Hybrid Crypto exchanges
For the ambitious and most innovative entrepreneurs and developers, starting a hybrid exchange may be the option. It’s essential to a combination of both centralized and decentralized exchanges. These platforms contain a central authority to govern the blockchain network and give users some control. It is also a preferred option when making crypto and will require you to build a crypto website. The technical budgeting is sky-high but guarantees success if marketed well in the radiant crypto market.
Step 3: Technical staff and budgeting
These two aspects go hand in hand when starting your crypto exchange platform. After understanding the type of exchange that will exploit Africa’s crypto market, you must understand the technical detail required to build the African blockchain startup.
The crypto exchange’s technical attributes comprise various utilities, tools and skillsets. Indeed having the proper skillset to manage and ensure your blockchain technology is functioning is crucial. In hind site bit, you still must build a crypto website regardless of the kind of exchange.
Fortunately, the technical and budget of starting your crypto exchange platform is relatively easy. Massive trading activities are now a norm in today’s society; thus, available tools are premade and ready. Some tools will help in making your crypto coin, but for another article.The parts that will make up your crypto exchange platforms are:
This is one of the critical elements that will formulate your crypto exchange platform. It will handle all the operations related to matching buyers and sellers, managing orders, calculating prices and delivering results. This will be the re of your crypto exchange platform and, more often, require you to build a crypto website to display its full functionalities.
This user interface allows crypto traders to interact with your exchange. The UI should contain the full functionalities of your exchange. In addition, it generally helps when different levels of crypto traders have access to different user interfaces. One of the core reasons that Africa’s crypto market still needs to catch up is a need for more awareness. Thus making a more straightforward user interface will attract new crypto traders while having an additional complex one will retain veteran crypto traders.
This is where all users’ funds are securely stored so they don’t get stolen or hacked. Prioritizing security and transparency within this sector is crucial in retaining customers and avoiding legal issues.
Verifies user credentials and authorizes users. This server is a crucial element when building a crypto website. Emphasis on its security sector is also a critical element.
APIs function as a means for communicating with other systems. They are ” bridges” that interconnect all the different functionalities within your system and services.
This is an apparent technical need. You must monitor and control every aspect of transpiring within your crypto exchange. Full functionalities of the Admin station panel will allow you to monitor and keep everything in order.
As for budgeting, understanding what each item costs is a basic fact. Fortunately, there are various ways African blockchain startups can attain funding, such as Series funding, Crowdfunding and many more. Yellow Card acquired its initial funding through Seres Funding after winning the favour of multiple investors.
Starting your crypto exchange platform step 4: Legalities
The last and, by far, cumbersome aspect of starting your crypto exchange platform is acquiring the various legal documentation to run your company legally. This is because only a few African countries have taken a liking to crypto within their economy.
This is generally quite ironic, given the continent’s sheer trading volume. There are a few exceptions t this, such as South Africa, which legally recognized crypto as a financial product ushering the doors of innovators and crypto exchange platforms.
Despite the “ban” on crypto, attaining all the legal documentation for small-scale or large-scale crypto exchanges is cumbersome. Roqqu recently attained its virtual currency license after two years of waiting, and finding the patience or means to attain all the legal documents for a crypto exchange is tiring. Fortunately, once you attain them, it ushers in a new demographic or possibilities.
Other factors to consider when starting your crypto exchange platform so far. These four will give you the right outlook. This is the beginning of a series to guide you in making crypto, building a crypto website and starting an African blockchain startup. So subscribe and stay alert for notifications.