Design a currency exchange system.

A currency exchange system requires careful consideration of several key components:

1. Exchange Rate Service: This service fetches and stores real-time exchange rates from reliable financial data providers. It should handle rate updates, historical data, and potential discrepancies. Caching strategies (e.g., Redis, Memcached) are crucial for performance, with decisions on push vs. pull models for cache invalidation.
2. Transaction Processing: This component handles user requests for currency conversion. It needs to be highly available and consistent, ensuring that the correct rates are applied and transactions are recorded accurately. Idempotency is key to prevent duplicate transactions.
3. Database: A robust database is needed to store user accounts, transaction history, and potentially cached exchange rates. Considerations include choosing between SQL and NoSQL based on access patterns and scalability needs, and performing back-of-the-envelope (BOE) calculations for storage and throughput requirements.
4. API Gateway: Acts as the entry point for all client requests, handling authentication, rate limiting, and routing to appropriate services.
5. Monitoring and Alerting: Essential for tracking system health, performance metrics, and detecting anomalies or failures.

Non-functional requirements (NFRs) like high availability, low latency, consistency, and scalability must be addressed throughout the design, particularly for the caching and transaction processing layers.