- Starting a fintech business is now free due to open-source crypto technology and exchange software
- The crypto technology is getting expotentially more powerful than traditional fintech tech
- Building with the technology is getting easier as more blockchains become standardized and widely adopted
- People are building a preference for crypto exchages as their bank
- DeFi is also challenging this notion of a bank
First, what’s open-source?
Open-sourcing your software is the practice and philosophy of sharing the code for free to anyone to use or build upon. Free is great but many think free software means bad software, this thinking is especially prevalent with financial institutions that
equate expensive software as good software.
But wait, isn’t that true?
False, the reality is the opposite, the fact is freely available open-source financial software is already better and will be exponentially better entering 2023.
If we take some examples from the real world, nearly everything you use is connected to open-source software. For example take your phone, it likely uses open-source Android. When your browse the internet on your phone you’re mostly likely using the open-source
Chrome web browser, and when you visit a website, that website is likely hosted on a computer that is operating on the open-source Linux OS.
Heck! Even your favourite first-person shooter computer game will likely link back to
id Software’s classic Doom game, which, you guessed it, was open-sourced.
All of the these marvelous applications are very important to our daily life, but what’s the most important? Money. Money is primordial.
But here lies the issue, nearly all financial technology or ‘fintech’ are closed off from public use. When we talk about your bank, or an ATM, even the stock exchange, many of these systems are likely operating on
So when we use the word fintech, it's a bit of a misnomer because ironically there isn’t much technology accessible for people to use.
Case in point, try building money apps on top of your own bank account. As a business you'd be hard pressed doing DIY finance, because building stuff on money is only allowed by a privileged few.
But all that’s changing thanks to blockchain based money protocols such as Bitcoin and Ethereum, which both by default are open-source monterey protocols. And thanks to new crypto software it is becoming easier to build with cryptocurrencies. The most popular
piece of software today are typically white label exchange solutions. These solutions provide tools that allow anyone to build new crypto-based financial products. Finally, some real fintech!
So what are the best free crypto software solutions out there?
Below are the top 3 best open-source crypto solutions that allow builders to make their own financial business applications:
Uniswap is the first majorly successful decentralized crypto exchange or DEX. Uniswap is simply a set of programs that run on the Ethereum blockchain which allow for decentralized
tokens to be swapped/traded.
What makes a DEX unique is that depositing money to trade isn’t required. Instead users connect directly, via a smart contract, with their crypto wallet app and transaction with the blockchain.
That’s because it is complicated! But the good news is the software is free. Anyone can
fork the Uniswap code and rebrand it as their own.
What can you build with the Uniswap code?
Uniswap allows anyone to easily build and operate their own DEX, providing a unique and potentially profitable opportunity in the world of cryptocurrency.
So what's the catch? It only works with Ethereum and (ERC-20 tokens). This means fiat currencies like USD or EUR won’t work (although stablecoins can). Another issue
is the user experience or UX is completely different from any other finance platform which may alienate your users/customers.
Finally, if you aren’t crypto tech savvy you're going to have a hard time putting it all together and so some technical capabilities might be necessary.
HollaEx is a complete out of the box crypto exchange. It is the easiest and most practical crypto solution currently out there. If you’re looking for the essential tools, this is it.
The biggest advantage when using this exchange kit is the fact that it requires zero coding.
Once you connect the exchange to your domain a full trading platform with crypto wallets and an easy-to-use user signup system will be ready for your users to use.
HollaEx provides the essential crypto buying and selling experience, and requires very little blockchain knowledge to operate. It also is extemely user-friendly for any customer base to trade on.
An optional cloud exchange service is available to expedit the hosting of the exchange. Users of the cloud solution will have their exchange automatically launched on a website domain of their choosing. For these services a small fee is charged monthly or
yearly bases. The cloud exchange greatly reduces the costs around development and server management.
However, if you have a little skill in managing servers, and know your way around the command-line, then HollaEx can be used entirely
downloaded and used for free.
Overall, HollaEx requires the least technical skill to use and allows businesses to create new ways to earn money. HollaEx only requires that the exchange software be hosted and just like that you have an globally operating crypto exchange business.
Lastly, for business savvy people they may find that the centralized exchange that HollaEx offers to be advantages for fiat currencies. The white label can easily integrate fiat payment systems or even a bank of your choice. This fiat-to-crypto connection
is much more difficult to pull off with a decentralized exchange.
Bisq is probably the trickiest to get your head around. Simply put, Bisq is like an open-source eBay style currency exchange.
Like eBay, Bisq requires the traders to make the transaction happen themselves, whilst with a typical crypto exchange the trade would be automated for the traders.
Bisq software is a lot like Uniswap but one difference is that users are required to run the Bisq software on their computers. That means there isn't any user-friendly website service.
Because it's entirely a peer-to-peer system transaction tend to be much more private and this targets a special market due to that fact. It also can be used for cash and depends on what the peers decide.
Bisq along with other
open-source crypto exchanges gives anyone the chance to build upon the software but may require a high level of technical knowledge due to its P2P nature.
The biggest advantage of Bisq is the built-in fiat based P2P trading which works through local bank transfers which is an elegant mix of traditional finance and crypto.
One downside to Bisq is the collateral requirement, meaning both parties that want to do an exchange are required to lock up their crypto in order to secure the trade. This makes developing and testing more complex for newbies.
Of the three, Bisq is the most challenging, but for those talented enough to build programs on top of their Bisq account can take advantage of price premium typically found in P2P markets. This does provide unique arbitrage opportunities. Premiums of over
20% can even be offered and any automated market maker here could carve out a nice niche.
It is important to think of the users that you're trying to build for.
Most people don’t know how to use a DeFi DEX style service. And most can’t afford putting up collateral in order to trade.
The fact is the sign up process with email is what everyones is used to using. Most users when it comes to their finances are looking for a typical banking like experience.
If your user base likes using Coinbase for example, then a standard crypto kit solution such as the HollaEx or even AlphaPoint could be an option.
But if your users are crypto experts then cloning the Uniswap code or building on Bisq could lead to more novel and experimental financial products.
It wasn’t until
crypto exchange kits and DeFi was released that it was even possible to build upon money and now the whole fintech space has been turned upside down. The main takeaway is free is actually better when it
comes to software because the technology exponentially improves as more people develop on it.
Who would've thought that the best things in life are actually free!