How do websites sell cryptocurrency with fiat payments?

0

I'm trying to create a platform to sell cryptocurrencies in my country. the way it works is, the user enters my website, select a coin he wants to buy then the amount he/she wants to buy, he pays in our common currency (say USD) and we should send him/her the cryptocurrency he has bought. the procedure is like most of the crypto shops, but the question is how should I get cryptos to sell? say a user wants to buy 5 Bitcoins, how should I have 5 Bitcoins to give him? how do other websites do this? Any help would be appreciated.

Thanks in advance.

Mohammad Siavashi

Posted 2019-05-15T21:25:41.600

Reputation: 113

1Hey and welcome to bitcoin SE, you would need a hotwallet to store the bitcoins that users buy. When a user buys, most sites use an automated system to send from the hotwallet to the user. Use a hotwallet so as to avoid someone exploiting an issue in your code and stealing all your btc! – Fuzzybear – 2019-05-16T10:23:34.820

Answers

4

Essentially you want to start a cryptocurrency exchange? If that is true, you need liquidity for people to be able to buy these coins. There are two ways of going about it:

  1. Use a broker/third party exchange, such as Kraken.com or any other in your region and have your orderbook go through their's. You would have to price it so you are profitable however.

  2. Prefund your own exchange. For example, you could buy 5BTC and keep it in a wallet designated for your website. So when a customer comes there you have that "cash" flow to sustain orders up to 5BTC. Obviously you would have to scale this up if needed.

I don't know which country you are in but normally this requires a money transmitter license (at least in the USA) for fiat to crypto gateways among others. If your question is referring to the technical/programmatic aspect of the exchange, that's a different answer.

Goose

Posted 2019-05-15T21:25:41.600

Reputation: 156

Thanks for your answer, no I have nothing do to with the programming aspect of it. yes, what I wanna do is an exchange platform. so I need to buy those Bitcoins or Altcoins in advance an have them in my websites wallet before I sell any? – Mohammad Siavashi – 2019-05-15T21:43:41.210

Yes, that would be called providing liquidity. – Goose – 2019-05-16T22:49:54.863

If the answer is sufficient, you can mark it with the green check mark underneath the up/down arrows. Thanks – Goose – 2019-05-18T23:04:41.590

Asked: 2019-05-15T21:25:41.600

Viewed: 44 times

Active: 2019-05-15T21:34:46.687