Crypto Exchanges: The Top Five ProblemsMay 27, 2019
People are scared of the words ‘cryptocurrency’ or ‘bitcoin’, thinking it’s an underworld that shouldn’t be touched. But they’re a real thing, and on the increase.
Cryptocurrency exchanges are becoming popular – a platform for cryptocurrency holders to exchange one type of digital asset to another. However, crypto exchanges are rife with issues. Here are the top 5, and how platforms can address them:
Security is an issue with crypto exchanges. Platforms are unregulated, meaning no-one is overseeing transactions or money made by exchanges. Because of the irreversible nature of transactions, they bring great appeal for criminals, with potential for scams and major fraud.
Platforms could improve security by implementing measures, including two-factor authentication, where users enter a code received in a text message or email before logging in, confirming their identity.
Users would benefit from funds being stored offline, known as cold storage. Another measure is IP address verification, only allowing those with a valid IP address to access the platform, eliminating unauthorized users from accessing funds.
Liquidity is one of the major issues faced by crypto trading exchanges, especially those with a limited user base. Moreover, during a surge of volume across the cryptocurrency trading platforms, leading crypto exchanges have experienced delays and technical difficulties, as their servers were unable to cope with the massive influx of activity.
To address these issues, many crypto exchanges are turning to a collective pool server – that is, an order book shared among various crypto exchanges. This way, even if there isn’t enough liquidity on the exchange, the exchange can leverage the collective pool to allow users to make transactions regardless.
- Customer Support
Receiving support on exchanges can take days, jumping through hoops to find answers. Many exchanges don’t know how to scale-up their operations for the amount of users they have. Ticketed support systems with multilingual support are crucial, as users from around the world can stay updated with the stage of their query.
- Trading Fees
Trading fees are a conundrum, as most cryptocurrency exchanges offer high fees for buying coins. Moreover, users don’t receive money made by the exchange’s commission. Offering incentives like an affiliate program and profit-sharing will help retain trading customers, as well as increasing liquidity
User adoption of crypto exchanges is important. But with a hard-to-use interface, users will look elsewhere, as scrolling down to access the order book and charts may turn a user away.
A simple one-page interface is a great solution, allowing users to view the order book and charts simultaneously. Enabling users to trade directly from the charts is another great way to improve the user experience. User retention will be maintained, as user experience is among the most important features, to fulfill the users’ needs.
Addressing the issues of crypto exchanges isn’t straightforward, but can be done by using up-to-date security measures, incentives for users to increase the platform’s liquidity, as well as unmatched customer support that expands customer loyalty, helping to bring exchanges into the mainstream.
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