Blockchain APIs and other developer tools can be used to create powerful applications for all sorts of uses within the cryptocurrency and blockchain space. Over the last 11 years since the genesis of the Bitcoin blockchain, the overall ecosystem has been evolving rapidly. Now, there are literally thousands of decentralized applications (dApps) and ways to incorporate the benefits of blockchain into centralized tools and systems, by harnessing the power of APIs.
Choosing the right API depends on what you want from your application. Once you know your use case, you can then narrow it down to the providers offering your chosen features.
Data Gathering and Portfolio Management
The blockchain and crypto sector produce a vast amount of information every second. Unlike the traditional markets, the cryptocurrency markets have no downtime, and trading happens around the clock.
For any serious traders or businesses involved in the crypto space, portfolio tracking can quickly become a headache. However, tax reporting obligations mean it’s a must-have. Not to mention a necessity for keeping a grip on profits and losses.
An API such as the Blox blockchain API will plug into multiple exchanges and blockchains, so you have full visibility of all cryptocurrency transactions in one place. It normalizes the data, meaning that everything is viewable in a standard format, rather than attempting to reconcile multiple sources of data in different formats.
Blox has integrated with 12 different exchanges, including Coinbase, Binance, Bitfinex, and OKEx, and all major blockchains, including Bitcoin, Ethereum, EOS, and Litecoin. The API makes it easy to select which integrations you wish to use and add more as you wish.
Merchant and Payment Services
Anyone accepting payments online can use a cryptocurrency API to extend their range of payment options into digital coins. Crypto payments typically attract lower fees than payments by credit card, and certainly less than payment providers such as PayPal.
Using an API service such as BitPay means that merchants don’t even have to handle the cryptocurrencies themselves if they don’t wish to. BitPay enables conversion from the crypto paid by the customer back to the fiat currency of the merchant. The company works with brands, including Microsoft, Shopify, and Neteller.
It’s even possible for brick-and-mortar stores to accept cryptocurrencies, indicating that you don’t necessarily have to be in the world of blockchain to benefit from blockchain APIs.
Wallet APIs enable companies to gain direct access to individual user’s crypto wallets without disclosing their private keys. For example, if a software-as-a-service app wanted to accept Bitcoin from customers on a monthly payment plan, the customer could authorize that their wallet sends the automated payment each month.
This is handled via an API such as the one offered by Coinbase. The API works for web-based, desktop, or mobile apps, and uses OAuth2.0, an industry-standard protocol for authorization.
Many different types of services in the crypto space, including information and news sites or crypto investment funds, need access to up-to-the-minute market data to help themselves or their users make investment decisions. Therefore, the biggest data aggregators offer comprehensive cryptocurrency API’s that allow anyone to plug into their data feeds. CoinMarketCap and CryptoCompare both offer comprehensive APIs, providing access to customized datasets according to needs.
Advanced and professional traders increasingly rely on algorithms to conduct their trading activities for them. Because crypto trading happens around the clock, algorithms mean that traders never have to miss an opportunity if the market moves while they’re asleep.
Algorithmic trading relies on exchange APIs. There are two options. Traders can either take advantage of a pre-programmed bot such as Haasbot, or they can plug into an exchange API, such as the Binance API, themselves.
Each has its own advantages. Using the option of a pre-programmed bot, a trader only has to configure their preferred trading strategies and failsafes, and they can set the bot to work. There is no programming or coding involved, and the bot is already connected to multiple exchanges. The drawback is that the trader is limited to the trading configurations that the bot offers and cannot completely customize it to their own requirements.
Conversely, by plugging into an exchange API themselves, traders can configure any trading strategies they wish, within the confines of what the exchange itself will allow.
There are several blockchain-specific APIs that provide developers with a more comprehensive range of API services, but for a specific blockchain. For example, Blockchain.com is the biggest API for Bitcoin developers, offering access to payment processing, wallet services, transaction and block data, and markets. While it’s limited to the Bitcoin blockchain, it’s one of the most-used APIs in the blockchain sector, with over 25,000 developers.
One of the Ethereum-based counterpart APIs is web3.js. Web3.js is more than just an API; it’s a collection of libraries enabling a developer to interact with an Ethereum node. However, because Ethereum’s smart contract capabilities are far broader than Bitcoin’s core function as digital money, it would be impossible to list all the things that a developer could build with web3.js.
These are just a few of the major use cases of a blockchain API, but they illustrate all the ways that anyone can tap into the power of a blockchain without necessarily needing to understand all the underlying infrastructure. As blockchain technology evolves, APIs will continue to provide the gateway to an entire ecosystem of decentralized infrastructure.