facebook pixel


What are APIs

An overview of API, what they are, the different types and their overall usefulness.

Rebecca lalav
Rebecca lalavFeb 08, 2023
What are APIs

API is the acronym for Application Programming Interface. The world is rapidly becoming an “API-powered economy” worth trillions of dollars. APIs allow software programs to communicate with one another by retrieving and interpreting data based on the user’s needs, which simplifies a lot of development work.

A brief History: APIs first appeared in computing history, long before the personal computer. An API was typically used as a library for operating systems at the time. Although it occasionally passed messages between mainframes, the API was almost always local to the systems on which it operated. APIs emerged from their confines after nearly 30 years. They started becoming an important technology for remote data integration by the early 2000s.

Here is how APIs work.

When you use a mobile phone application, it connects to the Internet and sends data to a server. The server then retrieves that data, interprets it, takes the appropriate actions, and sends it back to your phone. The application then interprets that data and displays the information you requested in a readable format. In simple terms that is how APIs work.

There are four different ways that APIs can work depending on when and why they were created.

REST APIs: These are the most popular and flexible APIs found on the web today. REST stands for Representational State Transfer. REST defines a set of functions like GET, PUT, DELETE, etc. that clients can use to access server data. The client sends requests to the server as data. The server uses this client input to start internal functions and returns output data back to the client.

Websocket APIs: Websocket API is another modern web API development that uses JSON objects to pass data. A WebSocket API supports two-way communication between client apps and the server. The server can send callback messages to connected clients, making it more efficient than REST API.

SOAP APIs: These APIs make use of SOAP (Simple Object Access Protocols), and it works with XML(extensible markup language) only. It is used by both the client and the server to exchange messages. This is a less flexible API that was once popular, we now have better ones.

RPC APIs: These APIs are referred to as Remote Procedure Calls. The client performs a function (or procedure) on the server, and the server returns the result to the client.

What are the different types of APIs?

APIs are classified based on their architecture and intended use. We’ve already discussed the various types of API architectures, so let’s take a look at the types of APIs: open APIs, partner APIs, internal APIs, and composite APIs.

  1. Public/Open APIs

These are open to the public and may be used by anyone. There may or not be some authorization and cost associated with these types of APIs. Making APIs public has several benefits, the most important of which is the ability to freely share data. This encourages any external business or developer to integrate with the app that owns the API, increasing the value of both the third-party software and the API. Third parties benefit from the open API’s lack of restrictions and ease of implementation.

  1. Partner APIs

With this access is restricted to authorized clients with official licenses, so security measures with partner APIs tend to be stronger than with public APIs. Some companies prefer partner APIs because they want more control over who can access their resources and more say over how those resources are used. Pinterest, for example, took a submission-based approach to granting partners access to new data services via its API, requiring partners to submit a request detailing how they intend to use the API before being granted access.

  1. Internal APIs

Internal APIs (also known as private APIs) are not intended for use by third parties, unlike open APIs and partner APIs. Internal APIs are only available for use within a company and are designed to streamline data transfers between teams and systems. These APIs are available to internal company developers, but not to external developers.

Internal APIs are frequently completely hidden from the public because they are not documented in a publicly released software development kit (or at all in some cases). However, many businesses eventually make their internal APIs public.

Using APIs for internal data transfers is thought to be more efficient, secure, and traceable. It is also a scalable solution, as when a company introduces a new internal system, this system can communicate with existing systems.

  1. Composite APIs

Composite APIs combine multiple APIs, allowing developers to group calls or requests and receive a single unified response from multiple servers. A composite API would be used if you needed data from multiple applications or data sources. Alternatively, you can use a composite API to initiate a chain of calls and responses without your intervention. Composite APIs, by reducing the total number of API calls, can result in less server load and overall faster systems, as well as reduced system complexity. They’re frequently used in microservices, where one job may require data from multiple internal APIs to complete. Consider the following Stoplight example: Assume you want to place an order using a shopping cart API. You might believe that all it takes is one request. However, several requests must be made. You must first create a customer profile. Then you must create the order, add an item, add another, and change the order’s status. Instead of making five separate API calls in quick succession, a composite API allows you to make just one.

What is an API gateway?

An API Gateway is an API management tool for enterprise clients that use a broad range of back-end services. API gateways typically handle common tasks like user authentication, statistics, and rate management that are applicable across all API calls.

What is GraphQL?

GraphQL is a query language designed specifically for APIs. It prioritizes providing clients with only the information they require. It is intended to make APIs more responsive, flexible, and developer-friendly. GraphQL, as an alternative to REST, allows front-end developers to query multiple databases, microservices, and APIs using a single GraphQL endpoint. Organizations choose GraphQL to build APIs because it allows them to develop applications more quickly. Read more about GraphQL here.

APIs vs webhooks

A webhook is a lightweight, event-driven communication channel between two APIs. Webhooks are commonly used by web apps to receive small amounts of data from other apps, but they can also be used to trigger automation workflows in GitOps environments.

Because they place the responsibility of communication on the server rather than the client, webhooks are also known as reverse APIs or push APIs. Instead of the client sending HTTP requests—asking for data until the server responds—the server sends a single HTTP POST request to the client as soon as the data is available. Webhooks, despite their moniker, are not APIs; they collaborate. In order to use a webhook, an application must have an API.

The Future

There are several trends that are likely to shape the future of APIs which are:

Increased use of microservices: Microservices is a software architectural style that involves building a single application as a suite of small, independent services. APIs play a key role in the communication between these services, and the use of microservices is likely to continue to grow in the future as it allows for more flexible and scalable systems.

Increased use of cloud-based APIs: Many organizations are moving their systems to the cloud, and APIs will play a key role in allowing these systems to communicate with each other and with on-premises systems. Cloud-based APIs are likely to become more common as organizations seek to take advantage of the scalability and flexibility of the cloud.

Increased focus on security: As more and more sensitive data is shared through APIs, there will be a greater focus on securing these interfaces to protect against unauthorized access and data breaches. This will likely involve the use of stronger authentication and authorization measures, as well as increased use of encryption to protect data in transit.

The continued evolution of API standards: There are a number of different standards for building and consuming APIs, and these standards are likely to continue to evolve as the needs of developers and organizations change. This could involve the development of new standards or the adoption of existing standards by a wider community of users.


Overall, APIs will continue to be a key part of the technology landscape, and their importance is likely to grow as more organizations adopt cloud-based systems and build complex software systems using microservices.

Bitpowr also provides a simplified API service to make it easier for developers to integrate with crypto. We also offer a comprehensive institutional wallet and digital asset management solution for exchanges, payment gateways, Neobanks, and other financial institutions. Reach out for more information on these services.



From the blog

The latest industry news, interviews, technologies, and resources.

Insights10 min read

Why is Bitcoin Valuable?

Rebecca lalav
Rebecca lalavMay 27, 2024
Insights6 min read

AML Policies in Blockchain Wallet

This article explains AML policies and their application to blockchain wallets, highlighting their importance in ensuring secure and legal digital transactions.

Rebecca lalav
Rebecca lalavMay 20, 2024



Be the first to know about releases and industry news and insights.

We care about your data in our privacy policy
Wallet Infrastructure
Wallet Infrastructure