Cryptocurrency is the live example of the application of DeFi (decentralized finance) which is a product in the new era started by blockchain technology. This DeFi technology is based on ledgers which are similar to those used by cryptocurrency that is distributed securely.
Like our fiat money, there are many exchange platforms here in this digital era for cryptocurrencies. Beyond trading in such exchanges, how can you benefit from the crypto exchanges?
The answer is Cryptocurrency Exchange Development. By availing a Cryptocurrency Exchange for yourself you can gain profits. But driving users to use your exchange is an elephant-in-a-room task. From the users’ perspective, security is their first preference when choosing a crypto exchange.
In recent years, cryptocurrency exchanges have become increasingly popular among investors. According to the ICO Rating report, 46% of cryptocurrency exchanges meet the required security parameters. In addition to endangering users' funds, this risks the reputation of the exchanges' creators.
Our goal in this article is to identify the best crypto exchange security features and identify the most common security risks associated with them.
What is Cryptocurrency Exchange Development?
Like a fiat-money exchange, cryptocurrency exchanges allow users to buy, sell and exchange various cryptocurrencies which are available in that particular exchange. Developing such an exchange is known as cryptocurrency exchange development.
This process starts with building a concept and idea for the exchange. After that, the Cryptocurrency Exchange Development process consists of the following stages.
● Interacting with experts to ensure its feasibility and its boundaries,
● Analysis of the business plan and current market trends,
● List out the features, rough scratch, time, and date for the final product,
● Developing the cryptocurrency project,
● Testing its flexibility, controllability, customization, and security,
● Finalizing the project, and
● Launching it in the market.
In the Cryptocurrency Exchange Development process, choosing the best Cryptocurrency Exchange Development company like CryproApe is crucial for getting a trustworthy Cryptocurrency exchange solution.
Analyzing the Flow of Work of a Cryptocurrency Exchange
Before checking the importance of security in a Cryptocurrency exchange, getting to know the workflow of a Cryptocurrency Exchange can help you to understand it.
● First of all, the users will be boarded during the registration process. It is supported by easy login and sign-up features.
● After login to the application, the users will get the wallet which helps the users to hold the cryptocurrency,
● The users can spend money from their wallets when they need it,
● During when exchanging process, a foreign currency can be bought once the cryptocurrency is sold,
● The withdrawal process allows the users to receive the funds in the currency of their choice.
This process can be done with centralized exchanges and decentralized exchanges. As the name suggests, centralized exchanges are restricted, regulated, and controlled by a centralized authority. It can be also known as CEX which stands for the Centralized Exchange.
Such CEX allows users to trade on the exchange’s database. That means, it is open to cyber attacks. While Decentralized exchanges also known as DEX, connect buyers and sellers through the P2P model. So, it can be identified as a peer-to-peer marketplace in that the transactions are done on blockchain technology that is impossible to hack. Let’s check about the centralized and decentralized cryptocurrency exchanges.
Centralized vs Decentralized Cryptocurrency Exchanges
At first, a centralized cryptocurrency market has a friendly environment for the new investors with an attractive and user-friendly UI and UX. It allows them to do financial activities by simply login into their corresponding accounts. Centralized exchanges have an extra dimension of security with serviceability when it comes to the game and trading, consolidated transactions.
However, the possibility of cyber-attacks is high when compared to decentralized exchanges. You can collect transaction costs in the high range when you are having a centralized cryptocurrency exchange as the high range of fees is usual for this kind of market.
When we speak about decentralized cryptocurrency exchanges, they have a minimum risk of being hacked. When you are having this kind of cryptocurrency exchange, you can provide cryptocurrency trade for friends, protection from fake accounts for business, and also wash trading.
Despite it having high-security aspects, it is hard to understand for beginner investors. It is less convenient for the users who haven’t any cryptocurrency holdings as it prevents users from trading fiat currency with digital currency. To put it in a nutshell, centralized crypto exchange development can ensure a user-friendly environment.
On another hand, decentralized crypto exchange development can ensure high-end security. Now let’s find out some important features of a crypto exchange development that ensures security.
Security Features of our Cryptocurrency Exchange
In order to prevent hacks, most cryptocurrency exchanges use two-factor authentication. User authentication is provided through one-time passwords for every transaction. Programs like Authy and Authenticator provide a more sophisticated version of this process. By requesting another code if the login and password have been compromised, these programs prevent access to the system.
In multi signature wallets, several keys have different owners, making them the second-most popular method of protection. Then, only electronic signatures can be collected to gain access. It is important to note, however, that this system can also malfunction. A multi-signature system can only work when each signer is independent of the others. The Bitcoin lock is one way to safeguard your virtual money.
In other words, two keys will be required: a standard digital key and a key with an additional layer of protection. The money are unlocked when the first key is input, but after 24 hours, the second key allows you complete access. If someone has both keys, they can burn the money in your wallet.
A recent report reveals that more than USD 1.7 billion has been stolen by hackers. And 54% of cryptocurrency exchanges do not have enough security measures to protect the data of their users. These kinds of stats and reports make the users more cautious about the security aspects of a cryptocurrency exchange.
● HTTPS Authentication - It is one of the more secure methods to authenticate clients. It has been using HTTPS for HTTP over SSL certificates. It ensures the integrity of the data between the user device and site data.
● Encrypted Data - It is one of the ways to translate data from unencrypted to a ciphertext that is encrypted to enhance security purposes. It prevents unauthorized access.
● Escrow Security System - It is a way of storing important cryptographic keys in an escrow system that connects the original user.
● Server Side Request Forgery Protection (SSRF) - An effective protection against cyber attacks to abuse server functionality to access or modify resources.
● Cross-Site Request Forgery Protection (CSRF) - Preventing the online attacks to force authenticated users of a Web app to submit a request against which they are currently authenticated.
● Secure Wallet Storage- Securing crypto wallets of the exchange to keep the private keys with multi-factor authentication.
● SSL Encryption - Protecting with standard security technology to establish an encrypted link between a server and a user can be known as SSL encryption.
● Two Factor Authentication - It is usually known as 2FA & it is an additional layer of security to ensure high security. For example, providing email verification in addition to passwords.
● Anti Denial of Service (DDoS) - Protection against online attacks to disrupt the real traffic of a targeted server or network by overwhelming the target with plenty of Internet traffic.
Along with these security features, a top-rated crypto exchange has Jail Login and SQL Injection Prevention. CryptoApe is a Top-notch Crypto exchange development company which provides more reliable and highly secured Crypto exchange platforms.
We develop the best crypto exchange platforms that assure the traders more secure and transparency in their exchange process. This helps you to build transparency in your crypto exchange platform and be able to capture the attention of the tranders all around the world.
Our team of experts are ready to help you with all the queries you have and able to bring the best customized crypto exchange solution for you. If you are interested in the Crypto exchange development with high-end security features, you can get in touch with us CryptoApe.
Through that, you can get a robust, interactive, user-friendly, and revenue-driven crypto exchange platform. CryptoApe has had expertise in Crypto exchange development for years. Which made us deliver the best crypto exchange platform as per the present market standard?
Summing Up
CryptoApe is one of the eminent crypto exchange or digital currency exchange (DCE) development companies. It has a team of IT experts to develop a platform to trade cryptocurrencies for other assets like fiat money or other digital currencies with high-end security measures.
