The cryptocurrency exchange is a vital aspect of the entire crypto world, offering an online platform where users can trade a variety of crypto coins, such as Bitcoin and Ethereum. As crypto gets more popular, the number of cryptocurrency exchanges has risen dramatically, and there’s now a giant selection to choose from.
One of the biggest factors that determines which crypto exchange someone will choose is security. But what security features can be integrated during crypto exchange development? We’ll look at a few below.
Two-factor authentication (2FA) is now commonly seen online, and not just at crypto exchanges. In its simplest form, 2FA requires users to undergo a second stage of authentication before they can access their account. So, once a password has been entered, users are then typically required to enter a code sent to their mobile device. This makes it far more difficult for unauthorised persons to access accounts.
Cold Wallet Integration
Every crypto user knows that cold wallets are the securest way to hold assets. These pieces of hardware are air-gapped and there’s therefore no way to gain access to them – unlike online accounts, which can theoretically be accessed at all times. During crypto exchange development, it’s vital that cold wallets are integrated with the platform, allowing users to carry out transactions from cold wallets directly. This means that the user never needs to transfer their currency to the more unsafe online wallets.
Access to accounts on a cryptocurrency exchange can be improved by introducing biometric authentication, such as facial recognition. This is particularly simple to do when developing a mobile crypto exchange app. Quite simply, it’s exceptionally tough for criminals to access accounts requiring facial recognition. Facial recognition also has another benefit for users: it lessens the reliance on passwords, which can easily be forgotten.
Phishing is a process used by attackers to fraudulently obtain sensitive information, such as the details of their crypto exchange account. Anti-phishing code can be included within all emails sent by an exchange, allowing users to easily identify real emails from phishing ones. Some major exchanges, such as Binance, already use anti-phishing code, but it’s not universally offered.
The final feature that all new cryptocurrency exchanges should offer is whitelisting. This allows users to nominate specific wallets as safe and for transactions with these wallets to be permitted. Should there be an attempted transaction with a non-whitelisted wallet, it will be blocked. This is a commonly used feature offered by Binance, Coinbase, and many other major crypto exchanges.
The Importance of Security
Clearly, security is one of the most important aspects of crypto exchanges, and those researching how to build a crypto exchange should make looking at security a priority. Quite simply, the more secure an exchange is, the more attractive it will be to users, so having sufficient security will drive business.
But exchanges should be mindful of the type of security they implement. With so many options out there, it is possible to use too many and make the exchange clunky and difficult to use. The best exchanges ensure they’re completely secure but don’t burden users with too many security features.
To find out more about crypto exchange development, contact KUNA Tech today. We’ve been running our own exchange, called KUNA.io, since 2014, so have plenty of experience in the world of crypto exchange development.