What is Luno?
Luno is a digital currency exchange facility that offers clients a technology platform to buy, sell and store digital currencies as well as pay for products and services using a cryptocurrency wallet. Digital currency is also known as a cryptocurrency and the two most famous examples are Bitcoin and Ether, the latter being the digital currency used to power Ethereum.
Formerly known as BitX, the company headquarters are in London, United Kingdom; and the company is represented in 40 countries around the world. However, Luno is focused on developing countries which have proven to be lead adopters of cryptocurrency. This includes South Africa, Nigeria, Indonesia, Zambia and Malaysia.
Luno was established in 2013 and is one of the early industry pioneers. By end of 2019, Luno had processed more than 8 billion dollars in transactions; offering exchanges between traditional global currencies and cryptocurrencies like Bitcoin and Ethereum.
What is a cryptocurrency exchange platform?
A cryptocurrency exchange platform facilitates the exchange of cryptocurrencies for traditional fiat money. Companies that operate exchange platforms came into being in 2009 with the launch of a decentralised cryptocurrency called Bitcoin. Many more cryptocurrencies have been launched since then, including the second most-popular one called Ether which is used to power Ethereum and Bitcoin Cash which was created through a Bitcoin Hard Fork.
A cryptocurrency exchange is either a ‘bricks-and-mortar’ business much like a bank that exchanges traditional fiat currencies (such as US Dollar, Euro and Pound Sterling), or it is a web-based platform that facilitates the exchange of fiat currencies and cryptocurrencies.
The business accepts credit card payments and electronic fund transfers in exchange for cryptocurrencies. It pays out cryptocurrencies into a customer’s cryptocurrency wallet or, in some cases, transfers it to a prepaid gift card that can be used to withdraw funds from any ATM in the world.
You typically access a cryptocurrency exchange platform by signing up on a website such as Luno, downloading an app from the App Store or you access it via Google Play.
What does Luno offer?
Luno offers its clients a simple and secure way to buy and sell Bitcoin and Ethereum using a built-in cryptocurrency wallet. It supports several global fiat currencies such as the US Dollar, Euro, Pound Sterling and the South African Rand.
Luno offers a brokerage service as well as offers training and consultancy services to help the general public understand the complexities of cryptocurrencies such as Bitcoin and Ethereum.
The company’s full-service offering includes:
Luno cryptocurrency trading platform
The cryptocurrency trading platform is core to the Luno website and is designed to facilitate the electronic process of buying and selling digital currency using fiat currency such as US Dollars, Euro and Pound Sterling.
The trading platform creates a linked account with your bank and you can immediately start trading Bitcoin or Ethereum as soon as your Luno account is verified.
Luno clients with registered accounts can trade digital currency with each other and Luno earns commission on all sales.
A Luno wallet is the software programme (app) that stores private and public cryptographic keys and interacts with the blockchain technology so that Luno clients can buy and sell cryptocurrency, store it and monitor transactions.
Basically, if you want to buy or sell any cryptocurrency, you need to have a cryptocurrency wallet. The public key stored in a Luno wallet facilitates payments to the wallet’s address; the private key facilitates spending of cryptocurrency from that address.
Luno brokerage service
Luno’s brokerage service facilitates the buying and selling of cryptocurrency through a dealer network, as opposed to a centralised exchange. A Luno broker connects sellers with buyers and pairs them for a sale. Cryptocurrency is sold or bought at a quoted exchange rate which includes a brokerage fee. The fee percentage varies according to market conditions.
The Luno brokerage service is the preferred option for larger trades as it tends to provide both parties with a better price and is more flexible and convenient.
API for developers
Luno API provides developers with financial information and trading capacity in the digital currency market. This functionality allows developers to work with Bitcoin and Ethereum to access blockchain technology which is required for tasks such as accessing current and historic cryptocurrency market data.
Cryptocurrency is a revolutionary decentralised digital currency and it’s confusing for even the most tech-savvy clients. Through Luno’s learning portal, you can learn more about the world of cryptocurrency, understand the language around Bitcoin and Ethereum and learn to trade cryptocurrency in a responsible manner.
The Luno Store is much like Google’s Play Store. It’s where Luno clients can go to find new and interesting crypto-based apps and services that have recently been launched in the digital currency space. The apps promoted in the Luno Store have been pre-screened and carefully vetted so they are safe to use.
How does Luno exchange currencies?
You can exchange cryptocurrencies such as Bitcoin and Ethereum in three easy steps through Luno:
Step 1: Sign up for a free Luno Wallet
Access Luno through your web browser or Smartphone and follow the easy registration process to set up your Luno profile.
Step 2: Deposit money into your Luno Wallet
Deposit any fiat value into your Luno Wallet using your preferred method of payment. This could be an electronic bank transfer or credit card payment.
Step 3: Buy the cryptocurrency of your choice
Purchase the amount of cryptocurrency you desire. It can be securely stored in your Luno Wallet or you can transfer it out of the Luno exchange.
How to buy Bitcoin or Ethereum through Luno?
Luno is different to many cryptocurrency exchanges in that it is designed primarily to simplify the process of buying Bitcoin (BTC) and Ethereum (ETH) with fiat currency, as opposed to trading one cryptocurrency for another.
Buying Bitcoins or Ethereum through Luno is a straightforward process but trading fees and conditions do depend on your country of residence. Certain countries require you to provide a unique reference number or deposit account as a security measure.
To buy Bitcoin and Ethereum, you first create a Luno account and go through a verification process to link it to your bank. Follow the easy steps to sync your bank account with your Luno account.
When your Luno account is verified and officially created via an email address of social media platform; you will be directed to WALLETS in the main menu.
Find the right wallet for your currency needs and make your first deposit. Depending on your location and whether there are further requirements to sync your bank account with Luno; you should be able to make an immediate fiat transfer from your bank to your Luno wallet.
When the funds have been transferred successfully, you will receive an email from Luno. From here on, you will be able to buy Bitcoin and Ethereum through Luno.
Where does Luno store my cryptocurrency?
Any Bitcoin, Bitcoin Cash or Ethereum that you receive is stored in your Luno wallet. This is not a physical wallet; it’s software that contains the private keys that authorise the owner of the cryptocurrency to send his or her “coins” to another wallet.
Cryptocurrency coins and cash are stored on the blockchain. The latter is a decentralised network that records digital currency transactions in much the same way as an old-fashioned accounting ledger. The individual blocks contain transactional information, and can be thought of as pages of the ledger.
Does Luno support Ethereum?
As of November 2017, Luno clients can create an Ethereum wallet which operates independently of a Bitcoin wallet. An Ethereum wallet is required to buy, sell and store Ethereum; it’s not possible to use a Bitcoin wallet to buy and sell Ethereum.
Is Bitcoin Cash available to trade on Luno?
Bitcoin Cash is now available to trade on Luno. To create a Bitcoin Cash (BCH) wallet, you select your BCH trading pair on the exchange and place an order. A new BCH wallet is automatically created for you which you can use to buy, sell or store your BCH. You can also create a BCH wallet manually by adding the function to your Luno account.
You send BCH to and from Luno wallets in the same way you send Bitcoin and Ethereum. You need to provide the sender or receiver with an appropriate address or your QR code. You can find these in the WALLET tab in the main menu.
Bitcoin Cash was launched in August 2017 through a community-activated update to the protocol or code from the Bitcoin blockchain; otherwise known as the Bitcoin Hard Fork. A fork occurs when a group of miners run a different version of the software. The purpose of the Bitcoin Hard Fork was to increase the block size so more transactions could be processed per block.
Bitcoin Cash is designed to be used for everyday cryptocurrency transactions and is cheaper and faster to trade than Bitcoin. Essentially, Bitcoin Cash is designed to be used as digital cash for regular currency transactions and competes with the likes of PayPal and Visa.
How much does Luno charge?
The fees Luno charges vary depending on your location, the currency you are trading and how active the cryptocurrency network is at the time of the trade. The fee to send Bitcoin or Ethereum to a wallet is dynamic, meaning it is adjusted according to the cryptocurrency network traffic.
A fee is charged to receive Bitcoin or Ethereum via an address. Sending and receiving Bitcoin and Ethereum via a mobile platform or an email address is free.
There is a fee charged for all fiat withdrawals and it differs depending on the country where the trade occurs. Likewise, Luno trading fees differ based on the national currency and the size of the transaction.
Is Luno safe to use?
Since it was launched in 2013, Luno has established itself as a trustworthy exchange website. The company offers an advanced level of security where a Luno wallet is secured via two-factor authentication and the account passwords are stored in a hashed form.
SSL encryption is used across the trading platform and Pretty Good Privacy (PGP) encryption is used to secure Luno wallets. Essentially, Luno keeps its clients’ funds stored in a series of “deep freeze” cold storage wallets which are significantly more secure than hot wallets.
The cold storage wallets are encrypted, multi-signature wallets where private keys are stored in individual bank vaults. The multi-signature features means that no one individual can access a Luno wallet without the cooperation of other parties.
What is two-factor authentication?
Two-factor authentication (2FA) is an extra layer of security, usually the addition of a unique once-off password. It typically requires a Luno client to have a second device such as a mobile phone to which the once-off code is sent. It’s much the same as a one-time password (OTP) used for banking transactions.
When two-factor authentication is required, you need to provide both your unique password and the once-off code for the Luno trading platform to authorise sign-in access or a digital currency transaction.
What is a multi-signature wallet?
The multi-signature (MultiSig) feature built into a Luno wallets requires multiple authorisation from different people to successfully send a transaction to a blockchain. If five people are authorised to send Bitcoin from a MultiSig Luno wallet, then at least 3 of the 5 must approve the transaction before it is authorised.
Luno provides a ‘hot wallet’ facility that is secured. Luno holds one of the required keys and the other key is held by BitGo. The latter is a prominent payment processor that safeguards essential key information through its multi-signature technology. An attacker would have to penetrate both Luno and BitGo to access a client’s wallet.
Where is Luno available?
Luno is currently available in the following developing countries:
- South Africa
Luno is available in the following countries in Europe:
- Czech Republic
- Isle of Man
- San Marino
- United Kingdom