is the future of our digitalised century; there is no doubt about it. It is not only I, who thinks this way but many more hopeful traders, tempted by digital enrichment. To satisfy all of us, companies have created platforms; there are thousands of them at the moment, but only some of the few are exceptional, successful and prosperous. One might ask themselves: ‘what is the key to success when running a exchange?’. There are five most important factors affecting the efficiency and productivity of the platform, which determine the success rate of platforms.
First and foremost characteristic of a successful crypto exchange is its safety. This characteristic is inevitable when it comes to platform’s concept. Nonetheless, among thousands of exchanges, only a minority is appropriately secured. This shortcoming derives from either from a low-budget business and the following implications or just careless developmental design of exchange’s digital structure. Such mistakes can result in exit scams, which are very popular across the internet, due to the unregulated nature of business. Therefore, if a crypto exchange offers funds protection by the implementation of segregated accounts and full ESCROW, the clients have much less to fear about their money. Another mean, which induces crypto security is the implementation of Anti-Money Laundering (AML) software. AML analyses and determines through its algorithms whether the source is legal (that is the desired scenario) or illegal (in this case, the source loses all their credibility, and their dirty money is off the table).
Another central feature of a reliable crypto exchange is its compliance with the local laws. Not everybody pays attention to this aspect, simply because exchanges are very rare and new systems in contrast to the traditional banking services. Additionally, there is no platform, which has to be compliant to any law — that, I would say, is an additional, bonus element, which adds reliability and influences the authenticity of an exchange. After what has been said, it can seem that this feature is not called for. And that is true; any legal institution does not require it, etc. However, what people very often miss, is that it should be demanded. Even though the business is still at the development stage, the full law compliance is becoming a public trust entity.
I do firmly believe, that a exchange would not be respected if it did not perform sufficiently fast transactions. Thus, the subsequent essential component of a satisfactory and efficient platform is the speed of the transactions it provides. The most problematic property of the market, when it comes to the speed of transactions, is the rapidity of the changes. If the speed of the transactions were not sufficient in respect to the change on the market, the whole crypto-construction would fall apart; however, there is a couple of innovative solutions, which help to avoid such mistakes. One of them I will mention is the Disruptor developed by LMAX. This creative tool sends messages between threads in the most efficient manner possible, which is supported by the ring buffer structure of the software. In simple words, all the events, which had previously occurred singularly, now occur parallelly. That approach could be tagged as a ‘game-changer’, because thanks to this model, an exchange can process up to six million transactions per second.
When it comes to the evaluation of not only exchanges, but any user-based platform, it is fundamental to provide a well-developed and well-designed site. Nobody likes to enter a website, which is overflowed with the design or overfilled with the potential choices to be made. The structure of the platform should be concise, coherent, and visually accessible. One could imagine a beginner entering a exchange full of all sorts of indexes, numbers, new nomenclature, plenty of buttons to click, etc. To my mind, there should be two types of design on the platform. The first one for the beginner users, who have never had any experience with the branch’s offer. It should be simple, brief, with all necessary options. Second, for more experienced users, who do not feel overwhelmed at the picture of a currency index and who feel comfortable with all choice selection provided by the more advanced website offer. No website should be too contrived and overthought, because the moment one does it, it loses all of its potential to become an internationally-recognised platform.
The simplicity of the exchange concept is a factor, which is very often left out. And how very wrong are developers and designers, who commit this mistake. Although it is very similar to the previous part, there is much more to that, than one might have thought! Playing on the stock is complicated; therefore, one can imagine how difficult it is to project and establish a brand new, original and innovative stock exchange. So everybody who has spent time comparing the platforms can say that it is the simplicity that is the vital feature of every project. One great example is narrowing down the relationship between the developer and the user. People find exchanges too complicated or too time-consuming when they have to find everything on their own from the very beginning. A simple solution such as well-developed FAQ section, or a private line with a team member should be a good lead. Another quick fix may be an explanatory tutorial, which will assure that people would not feel lost at their first try. There are numerous solutions, which guarantee positive feedback from the users, after their trial.
Some companies implement those features, and some find the other means to an end. What I have observed, is that those companies, which do apply those solutions have a higher success rate and people are much more interested in them. This should not be any wonderment from a straightforward reason: those implementations are fundamental for any project (especially financial services, such as exchanges) and should be treated as crypto-Decameron for those, who aim at conquering the digitalised world.
Antoni Arendarski
Published at Sat, 18 May 2019 16:45:41 +0000
