Why doesn’t Luno support more cryptocurrencies?
This is one of the most common queries that we receive from our community. We understand the validity of this question; it’s one we often ask ourselves.
With over 1500 alternative cryptocurrencies (altcoins) now in existence, and some exchanges supporting as many as possible – “Isn’t it in our best interest to add as many altcoins as we can?”
In short, our main priority is keeping our customers’ cryptocurrency safe, and ensuring the platform is simple to use for everyone.
We’re open to adding more cryptocurrencies, if and when appropriate; however, any new additions will need to be considered against our criteria.
We’ve delved much further into our selection criteria before, but we thought we’d revisit and reiterate why we currently only support Bitcoin and Ethereum.
Security, utility and market traction
One of the first things we look at is the security of the network. We take extra care to ensure the network is not vulnerable to issues such as:
- 51% attacks
- Double spending
- Security breaches
- Technical glitches
- Pump and dumps
Beyond security, we also take to a few other considerations:
- Does it solve a clear and unique use case? Does a working solution already exist?
- Does it have a large community of people who will be willing to adopt this solution?
- Is it decentralised? i.e. is it controlled by a single organisation or person?
- What does the team look like? Do they have experience?
- Does it have associations with pump and dump schemes or fraud?
There are lots of compelling cryptocurrency projects on the go at the moment.
Hopefully, this period of experimentation will lead to some useful, innovative outcomes.
Although optimistic, we remain cautious. Currently, we feel uncertain about the longevity of most of the projects in this space. Until then, we believe it doesn’t hurt to be extra careful, and we encourage you to do the same.
A multi-currency future
However, that’s not to say Bitcoin is the only worthwhile cryptocurrency. We predict decentralised cryptocurrencies will upgrade the world to a better financial system.
There’s no way to know if that will be Bitcoin or something different. Most altcoins represent new technology and are not designed to replace Bitcoin as a payment system. So it’s both possible and likely that at least some will coexist alongside it, serving various niches.
Altcoins are not inherently valuable, nor are they an automatic (or definitive) money-making machine. The vast majority are poorly made and short-lived.
For a cryptocurrency to have value, there must be a robust, sustained market demand for it. This is the most basic of economic principles, yet it often gets forgotten.
Regardless of how advantageous an altcoin is on paper, it has no value if people don’t want it. Short term price increases aren’t a useful indicator, as these may be temporary manipulation. Instead, we prefer to look for a sustained, stable growth.
We keep a close eye on all new developments in the space and are in constant conversation with other cryptocurrency companies, influencers, banks, regulators and more. We’re 100% open to the possibility of adding more cryptocurrencies, if appropriate.
This industry is set to change and develop in ways we can’t even begin to imagine right now so it would be silly to say we know what the future holds. We take a long-term view; we’re not focused on short-term gains. We’d rather wait and see how things pan out with new developments.
We’re not in a mad rush to jump on every new cryptocurrency that seems promising because that would jeopardise our long-term view. We know the industry is moving at lightning speed, but we believe it’s still okay to be patient if it means we make the right choices for our customers.
Keeping it simple
We want to ensure our customers can use Luno with ease. That means we think seriously about anything we add because we don’t want to overcomplicate it. It can be overwhelming if you’re new.
If you’re interested in alternative cryptocurrencies, you can still interact with them via Luno. If you have Bitcoin or Ethereum in your Luno wallet, you can use ShapeShift or Changelly to convert it to your desired cryptocurrency, instantly.