well after you settled everything with your exchange you do not need many people working on it, because the code is done, maitanance and small upograde can be done by the owner who built the whole site pretty easily, so there is no cost in this regard, they can also earn with leverage and fees, not only trading fees but any fee
also i'm sure that many employees which work there have other jobs, and perhaps they are only helping for small amount of hours a day, so do not counts it as a full pay wage
and I also have a feeling that they are good traders themselves, so maybe they trade on their own exchange with zero fees of course
Topic: Where do so many bitcoin exchanges get the money to stay open? - page 2. (Read 1864 times)
I think the big whales might be in control of such exchanges and therefore, have control over the market too with their fake crashes, etc. And a single man handling a whole exchange, as realistic as it may sound, might actually exist. You never know how hard people actually really work on such projects, I've met a man who has a team of 2 and handles such a venture 
There's so many bitcoin exchanges that have been open for months, if not years, that make so little in fees that they could barely afford to pay a single employee for a month.
What am I missing here? A lot of exchanges charge around 0.2-0.5% per trade, which, to even make $50k off of in a year, the exchange would need to do 10 million in trade volume. This instantly excludes all but the top exchanges. What about the majority of the other exchanges? I could see one computer software engineer alone setting up his/her own exchange with some hard work, but managing one with all the needed security, customer support requests, just seems implausible to do alone. I must be missing something.
What am I missing here? A lot of exchanges charge around 0.2-0.5% per trade, which, to even make $50k off of in a year, the exchange would need to do 10 million in trade volume. This instantly excludes all but the top exchanges. What about the majority of the other exchanges? I could see one computer software engineer alone setting up his/her own exchange with some hard work, but managing one with all the needed security, customer support requests, just seems implausible to do alone. I must be missing something.
It's easy. They play with the money of the customers. I want bitcoin and you want dollar. I put my bitcoin in the system and you put your dollars in the system. When the money "meet' each other the do the change and the owner of the exchange take his part without doing nothing. Naturally they have some reserves in the main currency but all the other are money of the customers.
Most of these exchanges get outside funding usually, or a group of investors.
Its usually not a indiviual thing, and they trade on the outbound fees to stay afloat with the cost.
Its usually not a indiviual thing, and they trade on the outbound fees to stay afloat with the cost.
Trading fees add up!
Its a very good thing that there are many exchanges out there. Obviously some serve very specific markets, and have the backing from domestic banks and the government making it easier for those in that respective region to use that exchange over others.
For a very able person, running an exchange is still a very difficult task however, and given the nature of the business, only those most confident with security should even attempt to run their own.
I can't think of any exchange that hasn't had security issues at some point in the lifetime, and to make matters worse, its a constant cat and mouse game.
In terms of surviving though, unless you do serve a very large client base, it doesn't cost a-lot even if you're not making any profit to run one. I suspect some exchanges like Yobit, EmpoEx, Bleutrade et al, are probably in this category.
One thing that I do love about markets in general though is that the survival of the fittest will weed out those that simply cannot afford to continue operating, or deem it too difficult. We all like to joke about places like Bitfinex (Particularly after the fiasco of August 2014, and August 2015 flash crashes) but the fact they have survived to this day is a testament to them adapting and serving a market that clearly require such a platform.
For a very able person, running an exchange is still a very difficult task however, and given the nature of the business, only those most confident with security should even attempt to run their own.
I can't think of any exchange that hasn't had security issues at some point in the lifetime, and to make matters worse, its a constant cat and mouse game.
In terms of surviving though, unless you do serve a very large client base, it doesn't cost a-lot even if you're not making any profit to run one. I suspect some exchanges like Yobit, EmpoEx, Bleutrade et al, are probably in this category.
One thing that I do love about markets in general though is that the survival of the fittest will weed out those that simply cannot afford to continue operating, or deem it too difficult. We all like to joke about places like Bitfinex (Particularly after the fiasco of August 2014, and August 2015 flash crashes) but the fact they have survived to this day is a testament to them adapting and serving a market that clearly require such a platform.
Even the largest crashed, you have to be very careful in choosing exchanges, best to distribute among a few exchanges.
I know what you mean. I guess a lot are hoping to gain a major foothold. It's a fairly changeable market. Gox was the daddy once upon a time, then Bitstamp, then China went mad and now Bitfinex is the top USD exchange.
They know their customers' balances and when orders are placed. There are no laws from stopping them from controlling what happens on the exchange to their own advantage. I'm sure that's a nice little earner for a few of them. You could also arrange a 'hack' at a certain point if you feel like topping up your balance.
They know their customers' balances and when orders are placed. There are no laws from stopping them from controlling what happens on the exchange to their own advantage. I'm sure that's a nice little earner for a few of them. You could also arrange a 'hack' at a certain point if you feel like topping up your balance.
There's so many bitcoin exchanges that have been open for months, if not years, that make so little in fees that they could barely afford to pay a single employee for a month.
What am I missing here? A lot of exchanges charge around 0.2-0.5% per trade, which, to even make $50k off of in a year, the exchange would need to do 10 million in trade volume. This instantly excludes all but the top exchanges. What about the majority of the other exchanges? I could see one computer software engineer alone setting up his/her own exchange with some hard work, but managing one with all the needed security, customer support requests, just seems implausible to do alone. I must be missing something.
What am I missing here? A lot of exchanges charge around 0.2-0.5% per trade, which, to even make $50k off of in a year, the exchange would need to do 10 million in trade volume. This instantly excludes all but the top exchanges. What about the majority of the other exchanges? I could see one computer software engineer alone setting up his/her own exchange with some hard work, but managing one with all the needed security, customer support requests, just seems implausible to do alone. I must be missing something.
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