APIs are a convenient way of developing a channel between different applications. Let's find out how APIs work and the ways they are assisting the crypto ecosystem!
Over the last two decades, Application Programming Interfaces (APIs) have become an essential part of the modern web ecosystem, and hundreds of millions of individuals, businesses and applications now rely on the data these services provide.
By acting as an intermediary between two applications, allowing them to share data and functionality, APIs can be used to power a huge range of experiences, use cases, and products — while simultaneously boosting efficiency for developers and businesses.
As an industry primarily based around cryptographic financial technologies and data-rich structures (blockchains, DAGs, and hashgraphs), APIs have become a staple component of today’s crypto landscape. And there are now dozens of popular APIs that provide a wide variety of data.
Before we dive into some of the most popular cryptocurrency APIs, let’s first examine what an API is and how they usually work.
What Is an API Key?
As we briefly touched on, an Application Programming Interface (API), is a set of protocols, routines, and tools used to build software and enable communication between different applications or systems.
Access to these protocols is controlled by means of API keys, which are issued by an API provider to the developers that want to access their APIs. API keys are a common means of authentication and authorization for accessing web-based services and applications.
These generally take the form of a string of alphanumeric characters generated by the provider of a web service. The client or end-user can take this API key and use it to gain access to the service. Whereas from the provider’s end, the API key can be used to track and control usage of the API or grant users individual permissions.
API keys come in a variety of types, including public keys, private keys, and encrypted keys — each of which serves different purposes and provides varying levels of security.
How Do APIs Work?
APIs provide a way for different applications to interact with each other in a structured and standardized manner — enabling software components to communicate and exchange information without requiring in-depth knowledge of the systems they interact with.
They typically work within the client-server model, where a client application requests data or performs an action from a server application, which then returns the requested information or confirms that the request has been completed. The API sets the rules that govern how the client and server can communicate and what kinds of actions can be performed.
The request method (e.g. GET, POST) is a key component of all APIs — GET retrieves data from a server, whereas POST submits data to the server. Other important components include the response format (e.g. JSON, XML), as well as the set of available endpoints that the API supports — these are URLs that link to particular actions or resources provided by the API.
What Is Representational State Transfer (REST)?
Representational State Transfer (REST) APIs are currently one of the best-known and most commonly used API designs. RESTful APIs use standard HTTP methods (e.g. GET, POST, PUT, DELETE) to interact with resources. These APIs usually respond with JSON or XML data formats, making them easy to use and widely supported.
By using APIs, developers can create powerful applications that can interact with a wide range of services and systems, making it easier to build new functionality and services.
In many cases, APIs can be accessed free of charge — but will usually be subject to heavy usage limits. Most API providers will offer one or more premium plans that offer several benefits, such as an increased maximum request quota, additional features, or higher data limits. Access is usually charged as a monthly subscription, based on usage, or sometimes a combination of both.
The CoinMarketCap API, for example, offers a free plan with 11 market data endpoints and up to 10,000 call credits per month, whereas premium plans have access to historical data, increased call credits, more endpoints, and more.
Popular Crypto APIs
In summary, APIs provide a standardized way for applications to communicate and exchange information with each other. They define a set of rules and protocols for this communication and can be implemented using various technologies, such as RESTful APIs.
As a data-heavy industry, APIs have become an essential component for accessing and using blockchain data and services, and there are now hundreds of different crypto APIs available. Indeed, most blockchain explorers, exchanges, terminals, price trackers, and oracle providers offer an API — many of which have a free plan.
Some of the popular crypto APIs currently include:
CoinMarketCap API: Provides developers with a wealth of real-time and historical data on cryptocurrency markets, including prices, trading volume, market capitalization, and other key metrics. With the API, developers can build custom applications and services that integrate with the cryptocurrency market and reveal insights/trends that other traders might miss.
Binance API: Provides real-time and historical data on cryptocurrency markets, including prices, order book depth, and trade details. It also allows users to place orders, manage their accounts, and access a range of other trading-related features. These capabilities can be used to create custom trading bots, analyze market trends, and build custom strategies to deploy across the platform’s supported markets.
Etherscan API: With the Etherscan API, developers can retrieve a variety of blockchain-based data, including block, account, and transaction data. It can also provide information related to smart contracts, including events logs and application binary interfaces (ABIs). The API also allows developers to easily interact with smart contracts, including writing data to the blockchain and invoking their functions.
DexTools API: The DexTools API primarily allows developers to retrieve a variety of data related to decentralized exchanges (DEXs) — including real-time price, volume, liquidity, and MEV activity. The API also enables interaction with liquidity pools, including trading and adding or removing liquidity.
Nomics: Provides developers with a wide range of real-time crypto asset data, including spot price, volume, market cap, liquidity, and more. It can also be used to create custom alerts relating to price movement or trading volume changes, or build predictive models by backtesting strategies.
These APIs (and others like them) are used by a wide range of developers and businesses to build applications that interact with the cryptocurrency ecosystem, making it easier to create new services and functionality. Today, they are being used to power thousands of web, desktop and mobile applications. For crypto projects, CoinMarketCap has a free API scholarship program and for individual crypto enthusiasts, a basic free plan. Happy exploring!
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