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Cryptocurrency exchanges emerged in 2010, attracting a limited number of tech geeks. “These platforms weren’t called “exchanges” at the time,” said Alexander Iurev, a founder at crypto software developer iCoinSoft . “Many of these pioneer trading solutions were hacked quickly, losing millions of investors’ dollars and, consequently, their trust.”
These early attempts, however, later stimulated the development of the crypto industry. Some larger market players spotted an opportunity and launched their own exchanges. They’ve been paying more attention to legal requirements and cybersecurity while trading digital assets.
As a result, some established developers also saw their chance and began offering crypto exchange software. One of these early adopters, a Swedish tech company Cinnober, was later acquired for $190 million by NASDAQ, one of the largest stock exchanges in the world.
Skyrocketing Demand for Software
“Starting in 2015, the demand for crypto exchange software skyrocketed,” Iurev said. His company, iCoinSoft, was one the first software developers registered in the US. “Most outsourcing teams, however, haven’t been able to ensure cybersecurity,” he added. “Some our early clients had to go through a few different developers before finally approaching us.”
The fast-growing market demanded fast solutions, and as a result, most crypto exchange founders prioritized the speed of software development over the quality of that software. “Everybody wanted to launch fast, attract as many users as possible, ignoring necessary updates and security measures,” Iurev said.
Most software developers have been using interpreted programming languages, although complied languages, preferred by traditional stock exchanges, such as NASDAQ, make it possible to execute orders tens or even hundreds of times faster. iCoinSoft became one of the first companies to develop crypto exchanges with compiled programming languages.
Leveraging New Technology
The infrastructure for digital trading is now improving, thanks to the regulatory environment. This year, the US Office of the Comptroller of the Currency (OCC) gave American banks permission to provide cryptocurrency custody services. In the letter, OCC recognized the increasing need for banks and other service providers, such as crypto exchanges, “to leverage new technology and innovative ways to provide traditional services on behalf of customers.”
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