Unless you have been living under a rock you have probably heard about Cryptocurrency. You may also have a slight idea of how it works.
In case you come from ‘Setenil de las Bodegas’ and you literally live under a rock… Let’s break it down
What are cryptocurrencies?
Simply put, cryptocurrencies are electronic peer-to-peer currencies. They don't physically exist. You can't pick up a bitcoin and hold it in your hand, or pull one out of your wallet. But just because you can't physically hold a bitcoin, it doesn't mean they aren't worth anything, as you've probably noticed by the rapidly rising prices of virtual currencies over the past couples of months.
Why were cryptocurrencies invented?
Technically, the idea of an electronic peer-to-peer currency was being tinkered with decades ago, but it wasn't truly successful until 2008, when bitcoin was conceived. The basis of bitcoin's creation, and all virtual currencies that have since followed, was to fix a number of perceived flaws with the way money is transmitted from one party to another.
What flaws? For example, think about how long it can take for a bank to settle a cross-border payment, or how financial institutions have been reaping the rewards of fees by acting as a third-party middleman during transactions. Cryptocurrencies work around the traditional financial system through the use of blockchain technology.
Is it true that cryptocurrency transactions are anonymous?
The answer to this is, "it depends." Most cryptocurrencies aren't as anonymous as you'd think. Sure, you don't have to supply your Social Security number or bank account to begin trading or investing in cryptocurrencies, but any transaction you make is still going to be recorded in the underlying digital ledger.
Now that we’ve broken down what Cryptocurrency is and how it takes away power from the banks and gives it to the people. Power to the people? What does that mean? Well…It would put everyone on equal footing for example, a universal currency would mean that countries like America won’t get to buy unfairly discounted goods from Africa, China etc because of their currency strength. All trading would be fair.
How do I start using cryptocurrency?
After hearing words like blockchains, digital ledgers and virtual currencies. You are probably thinking it’s not that easy to start using Bitcoin… and that’s where you would be right, but you are wrong too. Startups like Coinbase, Coindirect and Luno are making it easier for anyone to start buying, selling and trading cryptocurrency.
Luno has recently opened up shop in South Africa, this is a testament to the potential growth of Cryptocurrency in Africa. We took the time to investigate their solution, here is how it went.
As always, to start this investigation we will use the Five W's, more on them here.
Luno, a cryptocurrency startup.
A mobile application that let’s you buy, sell and trade cryptocurrency.
On your smartphone, they do also have a web platform
Anywhere, where you can find a cell phone signal.
To create easier access to cryptocurrency.
Let’s dive right into it. For this investigation I will be using an iPhone SE, It's a mid-cost IOS phone that retails for R2599, It runs on IOS 11 and is surprisingly good for the price you pay. The main reason I decided to use this cell phone is that it better represents the kind of cellphone, that the target market is likely to use.
I began by heading over to their website and I was greeted by the statement “The easiest way to buy Bitcoin and Ethereum”. Let’s hope they can back up that claim, anyways… I hit the ‘download on the app store’ button and downloaded the application. I don’t know about you but the site seems kind of bland and it took me a while to figure out that I could scroll down.
The application is smaller than most banking apps… but with some of them hitting numbers above 100mb, it’s not too hard to do. Opening the App looks like Deja Vu.. It looks very similar to the website, I guess it’s a consistency thing.
I clicked on ‘Sign Up’… I was delighted when I saw third party sign-up options on the bottom of the screen. I choose Facebook, an in-app browser appeared and I went through the process. After I had finished nothing happened I was just taken back to the sign up screen. I tried a few times and then decided to use Google… Still no luck!
I realised I had to do it the old fashion way… manually
The password criteria is 8 characters, 1 uppercase, 1 lowercase, 1 number. I know it’s a security thing but I’m not really a big fan of password criteria’s. Because I end up having different passwords for every platform I use and forgetting one of them is inevitable. Besides I don’t care how good of a hacker you are but you will never guess my friend’s cousin’s dog’s name written in hex code and then multiplied by two.
After choosing a ‘hard’ enough password I was taken to the next screen.
Simple enough, I like the option of opening my email app from their app. Good show!!! I waited for the email and after 5 seconds I couldn’t take it anymore and abandoned the process. I’m not the only one who is this impatient a study found that: 53% of visits to mobile sites are abandoned after 3 seconds.
5 seconds later the email arrived and I verified my email. After the that I had to create a pin… All doubts of the security of this app, were diminished after that.
Once I got into the app, I looked through it and I must say I really like the layout… it’s card based so it’s easier to differentiate information. The first card was informing me that I needed to verify my identity, Totally reasonable.
I proceeded to verify myself, there is a carousel that appears, in order to educate you as to why they need to verify your identity. I think more apps need to adopt this.
After verifying myself, I then attempted to add money to my Bitcoin wallet. There was a card already waiting on the home screen for me to help me with that. I clicked on it and I got more education… Again I repeat more apps need to adopt this.
You can deposit a minimum of R1 and deposits are completely free. When compared to the cheapest account FNB has, deposits are free for up to R3000 rand. You can see their full fees here.
To test it out I decided to deposit R1, I went through the below steps:
Yup that’s it! Although that is quite deceiving. You still have to go to your banking app and initiate the transaction. Also the reference code is easy to forget and there is no way to copy and paste it from the app. You might have to write it down somewhere, which sucks. They have an FNB account so it shouldn’t be too long till you see the funds in your wallet. They also have ABSA & Standard bank too.
*Update: So if you tap the border of the reference code, right at the top it should copy it for you, Thanks Phil!*
That about covers it for the On-boarding process...
For part 2, I will add more money and buy, sell bitcoin and also withdraw my money… Stay tuned for that.