Luno: cryptocurrency heavyweight reaches two million customers
The announcement from Luno, cryptocurrency wallet and exchange, that they now have 2 million customers has exemplified the surge in appetite globally for cryptocurrency trading and an interest in this new technology and what it can do for the future of money.
Adoption of cryptocurrencies has been driven by companies like Luno who offer a user-friendly, safe service and educate their customers about the risks and benefits associated with this exciting new technology. Luno’s safe and easy way to buy, store and learn about cryptocurrencies has led to a greater number of people feeling they can now confidently trade Bitcoin. Simplified and accessible exchange platforms meanthe cryptocurrency market is no longer just an outlet for the tech or financially savvy.
Named UK’s fastest growing startup by The Next Web and Adyen for 2018, and second fastest in Europe, Luno’s rapid growth is a testament to the wider adoption of cryptocurrencies across the globe. Consumers are increasingly embracing the ambitious vision championed by companies like Luno, working to reimagine a financial system where money is cheaper, faster, more transparent and interoperable with open and equal access for everyone.
To accommodate the rising demand, the business has now grown to a team of 250+ spread across three main hubs: the London headquarters, Singapore and Cape Town. Luno already empowers over two million customers in more than 40 countries worldwide with up to 30 new market launches in the pipeline
In the last month alone, more than $302 billion worth of cryptocurrency trades* have been completed globally. Bitcoin, the first and most popular cryptocurrency, now exceeds the $125 billion total market cap**.
Luno’s Head of UK & Ireland, Maya Kumar explains who is behind this exponential growth.
Users can be broadly divided into two categories: need and greed.
- The ‘Need’ group are the ones that typically use Bitcoin because it allows them to do something beyond the remit of the traditional financial system or at least provide a compelling alternative. The reasons for choosing Bitcoin vary widely but include cross-border e-commerce (seamlessly integration with the internet for online payments better than card payments) and cross-border payments (often faster or cheaper), people who’ve been affected by identity theft and want more security, a need for more privacy (for a greater control of their funds), and sometimes simply because it’s a better user experience, especially for mobile payments
- ‘Greed’ customers include active traders that capitalise on price fluctuations as well as long-term speculators or novelty buyers hoping for the value of Bitcoin to increase in the long run.
Other customers fall in the middle of this spectrum and can be classed as sophisticated users that are buying Bitcoin because they consider it an uncorrelated asset to diversify their portfolio. Another group is long-term investors that are buying based on better thought-out fundamentals and see Bitcoin as a viable alternative asset class that can potentially provide superior long-term returns and a real use case in an ever-changing modern economy.
Whilst we want to service the ‘need’ customers first and foremost, ‘greed’ helps to build liquidity for the system which is driving innovation, capital investment, new tools and new learnings – strengthening the cryptocurrency ecosystem further. More importantly, ‘greed’ accelerates inherent network effects in bitcoin. For example, the more people adopting bitcoin, the more people part of the Bitcoin network increases – leading to more people recognising it as a valuable asset class, more future use cases, leading to more liquidity and ultimately more ways to exchange it with others as a representation of value for good and services.
Continuing the growth
While the market is still small, there is an undeniable strong and growing demand for cryptocurrencies like Bitcoin. If you look across all industry metrics that are publicly available, from transactions to conversion volumes to wallets, you’ll see that forward momentum. We also see the same trends (if not better) in metrics within our own business, across multiple countries and continents.
In order to truly succeed in the long run, Bitcoin needs to experience some level of hyper-growth. But don’t be fooled by what seems like linear growth right now — it’s not. Evolution Partners and Singularity University penned a concept called ‘the deception of linear and exponential growth’; in short it means that when you are standing on an exponential growth curve and look backwards, the growth always feels linear.
So if we’re experiencing exponential growth, linear growth is exactly what it must look like in the beginning — it’s behaving just as it should. And we’ve seen this with many other technology explosions like smartphone and television adoption. It’s the same reason why technology is almost always adopted a lot faster than what most people think — they project the future on the linear past when it’s in fact exponential.
The end goal
The way people think and use money is changing fast. The existing financial system was built for a non-digital age, ignoring the needs of the modern individual; and is quickly becoming redundant. Like communication evolving from landlines to mobile phones, or post to email, we now have a technology – decentralised cryptocurrencies – that enables money to catch up with other information revolutions.
Cryptocurrencies, like Bitcoin, upgrade the world to something better: money that is cheaper, faster and safer, private yet transparent, interoperable and programmable and with open, equal access for everyone.
Upgrading to this new, better financial system will empower billions of people by lowering their cost of living, increasing the value retention of their wealth, stimulating innovation, unlocking new business models and economic opportunities, and overall by providing more financial freedom. It’s a change that is inevitable, and people need a company like Luno that can transition them safely. Ultimately, upgrading people’s financial system means upgrading their lives. Here’s to the next two million to join the money evolution.
*CoinMarketCap figures based on the analysis of 200 cryptocurrency exchanges by trade volume in the last 30 days (from 3 Aug 2018).
**CoinMarketCap Bitcoin market cap figures (3 Aug 2018).