Crypto investors all around the world have started inclining more towards cryptocurrency exchanges because of the opportunity they offer to trade a wide range of cryptocurrencies and boost profits, providing liquidity, convenience, and several other benefits. With the growing adoption and demand, crypto exchanges have further expanded over the years and have emerged into new forms, such as margin trading exchange, p2p exchange, etc. Apart from this, exchanges have also become lenders, custodians, etc., to offer more efficiency and convenience for users to execute trades on a cryptocurrency exchange platform.
With all that said, one thing that still seems obscure to some of the investors is the security of a cryptocurrency exchange. Most users’ funds are vouchsafed to the crypto exchange, therefore the security of a cryptocurrency exchange software is obviously the most important factor. Let’s take a look at what is the current state of security around the crypto space.
The Current Scenario Of Security In The Cryptosphere
There is quite a bit of challenge revolving around the crypto space when it comes to security. Aspects such as storage of funds, transaction records, and retrieving a coin depends upon a form of technology. This makes the exchange more prone to hack threats and other fraudulent activities. Most exchanges have also started offering mobile application support, which is highly beneficial but also makes it easy for hackers to break in. This implies a need for stronger security implementations and secure transactions.
To rectify these security concerns, many entrepreneurs and companies around the crypto space have started taking a few modern security measures to protect themselves and their businesses. Some are opting for a smart wallet, dependable smart contracts mechanism, practicing hot and cold storage techniques, and many more. Each option has its own benefits and downfalls as well.
Also, many companies have started offering cryptocurrency exchange development solutions to entrepreneurs due to the prevailing demand and competition. Such companies have started implementing strong, multi-layered security protocols into the exchange to help entrepreneurs safeguard their platform as well as the investors’ interest.
If you are looking to launch your own exchange as well, in this blog, we are going to focus on the key security features you need to look into to ensure a strong user base, sustain them, and secure and seamless business experience for both ends. So, let’s find out what they are.
Fundamental Security Features To Be Implemented Into Your Cryptocurrency Exchange Platform
A registry lock offers an additional layer of security to your cryptocurrency exchange platform by locking your domain at the registry level, which means your registrar cannot move your domain to another on its own. This makes it almost impossible for a hacker to modify or erase elements of your domain such as registration details. When you incorporate the registry lock feature into your exchange, you will undergo a three-way security passphrase between you( domain registrant), your service provider (the registrar), and the registry. This ensures top-level domain security for your cryptocurrency exchange software.
Implementing DNSSEC(Domain Name System Security Extensions)
DNSSEC is a series of protocols that authenticates all the DNS( Domain Name System) queries. It protects the system from forging DNS data via public-key cryptography and digital signatures to verify and validate the authenticity of the data. This helps eliminate unauthorized DNS entries, responses, and prevents users from authorizing websites that are prone to hacks and other malicious activities.
A cold wallet is a way to store and secure users’ crypto funds offline. Integrating a cold wallet into a cryptocurrency exchange software provides an added layer of security, as even if the exchange is hacked, the funds in the cold wallet remain unaffected. Most cold wallets are integrated with multi-signature and biometric authentication to protect the users’ access and make the wallet invulnerable to hacks.
Web Protocol Security
It is very important that you ensure the web protocol security of your exchange to prevent it from cyber-attacks. In order to do that, make sure your exchange is integrated with the following,
- HSTS( HTTP- Strict- Transport – Security) to be implemented to ensure the browning sessions have HTTP protocols.
- X-XXX Protection – This protocol prevents users from cross-site scripting attacks.
- CSP(Content- Security Policy) helps reduce risks of XSS attacks and determines which resources are allowed to load and which are not.
- X-Frame Options helps prevent your content from being embedded into other websites and protects it from click-jacking attacks.
Anti- DDoS Protection
DoS attacks generally target a network, or a server by swamping it with fake internet trafficking to disturb its smooth functionality. Many exchanges have been prone to this attack in the past, and have faced server downtime issues. To prevent this for your exchange, you have to integrate anti-DDoS hardware and software modules into your exchange such as network fireballs.
These are the major aspects of security you need to make your exchange comply to prevent it from any malicious activities. To simplify it for you, the most essential security features to be implemented into your cryptocurrency exchange software is as follows,
- HTTPS Authentication
- Jail Login
- Encrypted Data
- DoS( Anti-Denial of Service) and DDoS( Anti-Distributed Denial of Service) protection
- CSRF( Cross-Site Request Forgery) Protection
- SSRF( Server-Side Request Forgery) Protection
- Multi-Factor Authentication
- HTTP Parameter Pollution Protection
- Escrow System
The abovementioned are the mandatory security features to be integrated with your cryptocurrency exchange platform to ensure complete safety and security of the platform and the users’ funds.
Even though cryptocurrency exchanges have a history of hacks, the majority of entrepreneurs and investors who pitched in money on a crypto exchange have become millionaires which is the reason why the demand and competition are intensifying continuously. When millions of dollars are being rotated around an exchange, the security of the exchange should be given the utmost importance without a doubt.
But with the rapidly evolving technology advancements, companies have started offering more and more strong security implementations for users and the numbers of hacks and other theft issues are slowly dropping. To ensure yourself one such secure crypto exchange platform, you have to undergo extensive research and choose the right cryptocurrency exchange development company.
Cryptocurrency Exchange Script is one of the earliest to adopt this domain and is a dedicated crypto exchange development company with a team of developers, market experts, programmers, analysts, and strategists with second-to-none hands-on experience. We ensure a highly secure, stable, and scalable crypto exchange platform for any size of business. To find out more about our crypto exchange development solutions, get in touch with our experts.