Prior to the Internet, the majority of financial transactions were conducted over the phone. The buying and selling of financial securities moved online in the post-internet era, and the application of technology has advanced the process in many ways. One of these methods has been the development and application of crypto-friendly APIs. APIs are widespread in today’s financial ecosystem, as the world is rapidly becoming an “API-powered economy” worth trillions of dollars per year – and most people aren’t even aware they’re using one.
What Is An API?
The term ‘API’ refers to an application programming interface. A programme that allows one software application to interact with another is known as an API. An API is a messenger that accepts requests, tells a system what you want it to do, and then returns the system’s response to you.
Booking an airline flight on a flight price comparison website is a common example of API use that most people are familiar with. When you enter your desired departure and destination cities, travel dates and the number of passengers, the comparison site searches all available airline databases and serves you the options. This is accomplished through the use of APIs provided by each airline.
How Do Traders Use APIs?
As the name implies, a trading API allows you to interact with a trading system. It allows you to execute directly on an exchange, to be more specific. This is incredibly beneficial for traders who run algorithmic concepts on their own trading systems and want to receive live pricing as well as be able to execute trades manually or automatically via an algorithm once their model generates a trading signal.
Trading APIs are especially popular among hedge funds and proprietary trading firms due to their use of algorithmic trading initiatives. Still, trading APIs provided by online brokerages and, more recently, cryptocurrency exchanges can also be used by private investors.
The Trillion-Dollar API And Crypto Trading Opportunity
Crypto-friendly APIs have become an essential tool in the range of professional crypto traders, demonstrating the evolution of the cryptographic asset trading ecosystem. The more sophisticated investors who enter crypto-asset markets, the more APIs and algorithmic trading will be used. These trading programmes, which seek to capitalise on trading platforms, for example, would help make the cryptocurrency market more liquid and efficient.
APIs are essential in today’s digital world, just as they are in the world of financial trading. In fact, the world is rapidly becoming an “API-powered economy,” with annual revenues in trillions of dollars. A look at developer usage provides a snapshot of where APIs are used and why they will remain so valuable in the future. This includes the blockchain ecosystem and the digital economy.
APIs allow you to interact with the exchange programmatically (via software rather than a human interface) for cryptocurrency trading, allowing you to obtain real-time market data, make trades, and handle your account.