How to Create Your Own Bitcoin Exchange

Bitcoin is the beginning of something great: a currency without a government without a government, something necessary and imperative”. – Nassim Taleb (Statistician and Risk Analyst)

In 2017, bitcoin took the world by storm resulting in a huge surge in its value. In just 1 year, bitcoin saw its price rise around 1,800%. Despite China, until recently the world’s largest bitcoin market, cracking down on bitcoin exchanges in an attempt to curb capital outflows from the country, bitcoin’s price rose and rose as it found new markets in South Korea, Japan, and right here in the USA.

Bitcoin is now a regular topic on all the main news organizations including CNN, the Huffington Post, and the BBC. Just twelve months ago, these organizations showed little to no interest in the cryptocurrency revolution, meaning that most of the public was still completely unaware of bitcoin.

Today it is hard to find anyone under the age of 50 who has not heard of bitcoin. Leading entrepreneurs like Bill Gates, the Winklevoss Twins, and even politicians such as Al Gore are strong proponents of bitcoin and the 1,300 or so ‘altcoins’ that currently exist in the cryptocurrency marketplace.


While the blockchain technology underlying these cryptocurrencies is revolutionary, the main challenge that this new technology faces is to gain mass acceptance by the merchants that need to accept it in order to make it a viable alternative to existing currencies.

In this article, I aim to give an overview as to how to create your own bitcoin exchange. There are several different approaches that will enable you to do so, all of which I will cover here.

For those people who are able to create a prosperous bitcoin exchange, the financial rewards could be enormous. However, as the collapse of Mt. Gox exchange proves, the bitcoin market is highly volatile and unpredictable, meaning that there are enormous risks too.

Article Summary:

What is a Bitcoin exchange?


Bitcoin is a blockchain based peer-to-peer currency system. Since it is decentralized, it cannot be controlled by any outside party such as banks or governments.

This is the undoubtedly the main hurdle that cryptocurrencies must overcome in order to go mainstream. How long this will take is anyone’s guess, because let’s face it, governments don’t like it when they can’t control something.

In order for individuals to buy or sell bitcoin or other cryptocurrencies they must use an exchange. A bitcoin exchange is quite simply a digital money exchange where people can buy and sell bitcoin. As people buy and sell bitcoin the price will rise or fall relative to the volume being sold.

While it is hoped that in the future the price of bitcoin will become more stable, it will always change depending on how much is being bought or sold at any given moment. An exchange should therefore be considered as a living breathing entity that must always stay up-to-date and functional in order to succeed.

Bitcoin exchanges are essential to the use and overall success of bitcoin and other digital currencies. Since these cryptocurrencies are only accepted by a small but growing number of vendors the main volume of transactions is done via exchanges.

Why open a bitcoin exchange?

Well, after all, why does anyone want to start a business? While setting up a bitcoin exchange can be a daunting task, there are potentially huge financial rewards as well as the gratification of having been a central player in a technology that is going to completely change the world.


It is a considerable possibility that one day there might be no banks left to control how we live our lives. We will be able to directly pay for goods and services via our cryptocurrencies while through blockchain based projects such as Ethereum, we will be able to access loans and mortgages.

Imagine going on holiday and not having to pay massive currency conversion fees or getting a loan without massive interest fees added each month. Wouldn’t that be great? Well, these things are entirely within our reach thanks to cryptocurrencies and other blockchain technologies.

At this early stage of cryptocurrency development, we need these vital cryptocurrency exchanges to facilitate transactions to help this new technology alive. So to start a cryptocurrency exchange is not just about the money, it is about helping to change the world too.

“Bitcoin might revolutionize more than money or economics. It could transform the role and nature of government.” – Leon Louw

How to Create Your Own Bitcoin Exchange


As with any new software there is a lot of work to be done before you get anywhere near the programming part. When it comes to creating your own bitcoin exchange you will need to get a clear understanding of your target market before you begin.

Another extremely important part of the planning stage is to research the laws in your particular country that may or may not exist governing cryptocurrencies. Finally, you will also need to define exactly what kind of exchange you plan to set up and decide how it will function.

Step 1: Brush up on the competition

A really great place to start is to do some research on existing bitcoin exchanges. For a list of the most popular exchanges that handle the vast majority of the entire world’s bitcoin transactions click this link.

It is advisable to do plenty of research to find out exactly how these exchanges came to be as successful as they are today. Not only is this an extremely interesting bit of cryptocurrency history but it will also give you plenty of great ideas on how to create your own bitcoin exchange website and how to market it so it becomes a success.

An important bit of advice is not to let any of this information water down your own new and innovative ideas. Right now the entire cryptocurrency industry is being fueled by innovation. Fortunately, this new technology is proving just how much innovation and new ideas there are out there.

Because of the threat that this new technology poses, it is being an attacked by traditionalists from all different backgrounds. Bitcoin has been repeatedly called a ‘bubble’ by countless bankers and has been dismissed as something that is little more than a valueless fad.

The irony of this statement is that this is exactly the accusation made by people in the know about gold trading, which as this interesting article highlights might have for years been made off the back of poor quality gold or gold reserves that don’t exist at all.

Step 2: Decide on where your business will operate

Do you want your exchange to do business globally or will it just be for a few select countries?

This is an extremely important part of planning a new bitcoin exchange. Why? Well, the reason is that while a large global exchange is more likely to earn you lots of money, it also means that your exchange has to conform to the laws in every country in which it operates.

Falling foul of the law in any country could mean that you end up with massive court fees or worse, end up in jail. You only need to take a look at another peer-to-peer technology, file sharing, to see the dangers of operating a website that falls foul of the law. The creators of the file-sharing site The Pirate Bay, found themselves in jail for their actions while Kim Dot Com is currently fighting extradition to the United States for similar charges.

You will almost certainly need to get some form of operator’s license in every country or territory that you choose to operate. This will not only require a load of paperwork and address/business registration, but will also most likely require expensive lawyers to ensure you are in compliance with all the local laws and regulations. With nearly 200 countries in the world, this can get expensive.

Keep in mind that due to the fast-changing landscape of the growth of cryptocurrency technology, things such as regulations change from day-to-day. For example, do you know that the European Union has recently announced that it plans to bring in new laws requiring all individual’s identities to be recorded by their bitcoin exchange?

Step 3: Access your target market


This is the part of pre-planning that will ultimately determine how successful your site will be. Knowing your target market will allow you to create both a product and marketing strategy that will allow your site to florish.

While in the case of a bitcoin exchange the answer might seem obvious, believe us it is a lot more complicated than it might at first appear. People of all ages from all types of backgrounds are now investing in bitcoin.

Not only that, some bitcoin exchanges operate in numerous countries around the globe and so are available in different languages. These are the kinds of things you will need to think about before you can define what your site is going to be.

Step 4: Define your site

The final step before you get programming is to work out exactly how you want your bitcoin exchange to look and function. While any site should look professionally done and secure, these two features are particularly important for any bitcoin exchange. If people think that the site looks insecure or find themselves frustrated by slow page loading times or other functionality issues, they simply won’t use it.

Key to your site’s success will be its security. There have been several high profile hacks of cryptocurrency exchanges over the last few years, including Mt. Gox which resulted in nearly 1% of all the entire Bitcoin in circulation being stolen. A more recent example was the South Korean exchange Youbit, which was reportedly hacked by the North Korean government in 2017.

Another thing you can decide is whether you will allow users to trade in other cryptocurrencies too. This will certainly boost user interest and satisfaction in your exchange as people will be able to conduct their investments entirely under one roof. The drawback is the logistical challenge of incorporating all these currencies. For a list of the most popular cryptocurrencies, you can click this link.

One of the main ways to make the development side of creating your own bitcoin exchange as smooth and painless as possible is to hire a top blockchain developer or a good dev team. These individuals will have the expertise and experience to ensure that your project is a complete success. It might cost more money but the investment is certainly worth it.

Step 5: Synchronous, Asynchronous or Distributed?

Most cryptocurrency exchanges currently operate the asynchronous model. While synchronous exchanges are the most simple to set up and operate, they don’t allow for much in the way of scalability. Asynchronous, on the other hand, allows for large increases in trading volumes as it works by passing requests between the UI and dedicated machines that queue and update the request with the UI after it has been executed.

For more on Synchronous, Asynchronous or Distributed, please read this link.

Step 6: Get coding

At this stage, there are several options as to how you go about creating your own bitcoin exchange.

  1. Download an existing open source exchange program

Open source bitcoin exchange software has a number of benefits over developing your own in-house software. Firstly, it is completely free and secondly, it saves huge amounts of development time. You can download a number of existing open source bitcoin exchange programs and therefore theoretically open a bitcoin exchange within hours.

If you choose to go down this road, sites like GitHub are a great place to find the software that best suits your needs.

The main drawback to this approach is that what you will end up with is exactly what is already being used by at least one other exchange. Therefore, you will still need a specialist to develop the unique features that you would like to incorporate into it. Also, should you have problems pertaining to the original code, there is not much in the way of help to fall back on.

2.    White Label Bitcoin Exchange

White label software can be customized to suit your business model and saves from having to do much in the way of software development. Another hugely important benefit is that the software will already be tried and tested meaning that the chances of bugs etc. are greatly reduced. The main drawback is that the options are relatively limited when compared to writing the code yourself.

One company that offers a reliable software package that enables you to set up your own bitcoin exchange is BTCTrader. Their package allows individuals and companies to “start your local bitcoin exchange in 45 days.”

3.    In-house software

Should you feel that you want to create an entirely new bitcoin exchange from the ground up then you can enlist the help of several freelance programmers or a dedicated dev team to do the hard work for you.


While this route is certainly the most expensive it can also be the most rewarding. Because of the detailed planning, time to write and debug the code, as well as test the exchange, this route also is by far the most time-consuming. Typically, to create an exchange from scratch will take around a year, though a large dev team can accomplish the task in a shorter time.

Step 7: Find a bank or other payment processor


In order to operate an exchange, you will need a bank or other payment processor to process fiat currency. This will allow your customers to use their money to buy and sell bitcoin. You will need to keep in mind that at the current time, most banks won’t touch bitcoin with a barge pole, so finding one which will allow you to open an account for your bitcoin exchange might be easier said than done.

Since the aim of your exchange is to eventually process a high volume of bitcoin transactions, you will need to make sure that the account you plan to open is suitable for such use. If you try to use a personal account, for example, it will most certainly get shut down within a week.

Another extremely important tip when choosing a bank is to find one that offers fast payment processing. While the average time banks take to process these sorts of transactions is 2 days, some banks do manage to do it faster.

Step 8: Fire up your marketing strategy

You should have already put in motion your marketing strategy before you launched your Bitcoin exchange. Setting up an account with all the social media sites along with writing posts/articles to inform people of the impending launch of your site is just one of the important steps.

Try to use the unique features of your site to create a ‘buzz’ about the launch. Recent research has shown that the growth of cryptocurrencies is very similar to the pattern created when social media first emerged. This seems to indicate that word of mouth is the most important way to spread the news about cryptocurrencies and exchanges. Try to tap into this the best you can. The great news is that it is completely free!

Targets you will need to meet to ensure your site grows:

User growth

Even if you have done plenty of work before launching your site there is still no guarantee that people will immediately jump on board. Setting realistic growth targets will help to keep the motivation that you will need to make your exchange a success. Hard work is essential, as is a can-do attitude combined with a never give up approach.

One area you can help things along is by utilizing the help of the Market Maker service to simulate liquidity. This service will create virtual transactions to generate activity on your exchange. Since the price of bitcoin never remains the same, this service will create the impression of a healthy exchange.


Security is a vital part of your ongoing bitcoin exchange development. Any security weakness or breach should be dealt with immediately and with extreme seriousness. Even if it means you staying in the office the entire weekend, making sure your site is secure is of the utmost importance. Hackers will almost certainly target your exchange at some point or another so be prepared.

Since your site will hold sensitive information such as credit card details, you should have a series of procedures in place to cope with any breaches of data. While past breaches have sought to steal users bitcoins, hackers might choose to steal credit card information and other personal data too.

Keep in mind you also need to protect this data from internal staff members too. For more information on the security risks related to bitcoin exchanges, you can read this helpful article.

Maximize site uptime and page load speeds

People will be using your site to trade their hard earned money, so your site should always seem like it is bulletproof. Slow page loading times not only frustrate users but also cost them money when it comes to buying and selling currencies. For the same reason, rapid server response to users is also vital.

As users prefer to buy using a set price feature, a delay in processing the transaction will mean a deviation in the buy/sell price from the one the user originally agreed too. While some exchanges actually make up the difference themselves, others use their terms and conditions to notify users of potential discrepancies.

If your site has anything less than a 99.99% uptime, it will likely result in users turning away from the site believing it to be unsafe. If you do ever have to take your site offline, ensure that you issue a press release as quick as possible explaining the causes. Coinbase has managed to maintain its reputation and client base thanks to good communication.

Make sure your customers are happy

Your users won’t ever get much of a chance to interact with the human face of your site provided it has been well designed and managed. When things do go wrong, you should make sure that you have a dedicated and friendly team of customer support agents ready to help out.

Another way to keep them happy is not to play around with the user interface too much and not to fill your site with ads. While ads are a good way to fill space and generate additional income, most people these days don’t like sites filled with ads.

Always seek innovative new ways to keep your site ahead

Innovation is king when it comes to any industry. Always keeping up to date with changes as well as trying to build in new ways to keep your customers happy will help your site to thrive.

As I mentioned earlier, allowing users to buy and sell multiple cryptocurrencies is one way to attract new users. Users have cited their frustration at sites such as Coinbase, which still only offers access to a limited number of cryptocurrencies.

Allowing users to automate buying and selling currencies is another increasingly valued service. Users can set prices at which they wish to buy and sell currencies as well as automating buy/sell volumes without needing to authorize the transition each time.

These are a few of the current changes taking place within cryptocurrency exchanges. For those exchanges that are able to introduce new ways to make buying and selling bitcoin easier and more user-friendly, users will inevitably flock to them in droves.

Aran Davies

Aran Davies

Blockchain Expert | Developer | Writer | Photographer
Aran Davies