APIs (application program interfaces) enable one system to communicate with another. APIs are frequently used to connect with crypto exchanges in the case of cryptocurrencies. The blockchain industry is fast expanding beyond individual cryptocurrency users and retail investors, with institutional adoption increasing over time. While corporations have been hesitant to use blockchain technology for a variety of reasons, including its intricacy, scalability concerns, and lack of fit, this has continued to shift recently as the technology’s benefits have become more widely acknowledged.
Through API connectivity, many complementary businesses and tools have been built, such as cryptocurrency portfolio trackers, trading bots, tax software, and many others. Some crypto APIs include many functions, allowing you to make better use of them. However, combining various APIs for best performance in every one of your jobs is a fantastic idea to work better and faster. API’s are quite essential when dealing with fiat off-ramping and fiat on-ramping.
It’s critical to comprehend the varied levels of access granted by different cryptocurrency exchange APIs. Your exchange account settings allow you to specify what kind of access your API key should grant.
‘Read-Only’ Or ‘View-Only’ Access
Read only access allows the system connecting to the exchange API to only “read” or “view” the transaction data for that user account. Portfolio trackers and tax software systems rely on this type of granted access to do their job well because they only need to know your transaction history.
- Trade Access
When you create an API key granting “trade” access, the application you are using can make trades on your behalf. Crypto trading bots that users utilise to execute various trading methods frequently have this type of access. With this level of access, you should have complete faith in the organisation or tool trading on your behalf. They should have strong security procedures in place to ensure the safety of your keys.
- Transfer Access
The connected program can conduct transfers and withdrawals on your behalf, as well as transmit and receive cryptocurrency. Again, you must have a high level of trust in the program/tool because this access might potentially sweep your funds and send it to a completely new wallet address.
Benefits of an API are:
- APIs ensure the capture of all trading activities.
- Prevents human error from picking incorrect trade dates in the past.
- Capable of capturing complete information.
- It doesn’t have to unzip data, alter CSV files, change international dates, or convert to the standard reporting template, which saves time.
- Saves costs
- Increases productivity
Generating Your API key
You may create your API keys with confidence now that you know what these different levels of access do. As you can see, the sole permission provided with this API key is “read only” access. The options for enabling trading and allowing withdrawals have both been left unchecked.
The APIs are created to make your crypto journey as smooth as possible. The use of application program interfaces is critical when dealing with cryptocurrency exchange accounts. There are numerous benefits that an API can offer. Aside from simple currency exchange, the API enables for the creation of a number of other functions.