The world is becoming a different place.
In this dramatic change, cryptocurrencies and bitcoin in particular, are becoming hot topics that are at the centre of disrupting established industries.
Cloud has been central to enabling cryptocurrencies and bitcoin to transform the world.
This is no surprise that Luno, a bitcoin platform which is backed by Naspers, has used cloud to scale its business.
Luno, which is one of the world’s most popular Bitcoin platforms, has relied on cloud computing firm Amazon Web Services (AWS) to build scale and enter new markets.
“We leverage the various services provided by Amazon (such as EC2, RDS, S3, Redshift, and others) to achieve a high level of scalability, reliability and security – allowing our platform to handle millions of customers easily,” Timothy Stranex, CTO of Luno, told TechFinancials.
“Using these services allow us to focus on our core business without needing to “reinvent the wheel”.
Now, Luno has over 2 million customers globally.
AWS Enables Luno to be Agile
The London-headquartered company said AWS has enable it to be more agile—and more secure, “as we can optimize critical aspects of our operations and build a foundation for long-term innovation and growth”.
Cryptocurrencies are basically the same as e-money — like WebMoney or PayPal. That means they also have the same problems as classic e-payment systems. Take phishing, for example, as with ordinary e-money, users can be tricked into going to a phishing website where they upload their cryptowallets and enter a password.
There have previously been some high profile hacks of Bitcoin Exchanges. However, these didn’t happen because Exchanges are inherently unsafe – they were the result of poor security from companies that weren’t committed to keep their customers’ money safe.
Luno has never Been Hacked
So, how is Luno handling security for its customers and its business?
“Unlike most Exchanges, Luno has bank level security based on our experience working directly with banks. We store funds using multi-signature security with independent security partners. Private keys are split across different bank vaults around the world,” Stranex says.
“This means that it is impossible for a single individual or group to steal them. To allow instant withdrawals, we maintain a multi-signature hot wallet and split the key between Luno and security leader BitGo. A hacker would have to break in both systems to access the key.”
He further explains that sensitive customer information- especially passwords- is stored in a hashed form so absolutely no one can access it (not even Luno’s team.)
“We also carry out regular financial and security audits to test the systems. Storing money in a Luno Wallet is as secure as storing it in a bank. Clearly, security is critical to our customers and our business,” he explained.
With services such as Amazon VPC and IAM, and features like audit logging and security groups, Stranex said Luno is confident that it can provide a trusted service to its clients.
“The other aspect of security with AWS is the time the team saves in auditing. With AWS, security procedures are 10 times faster than if we had to do everything from scratch.”
AWS Cloud Offers Scalability
The company that has South African roots also relies on AWS’s data centres to scale and move into new markets.
Luno operates through its offices in London, Singapore and Cape Town and its services are now be available in 40 countries across three continents. The company is always looking for geographic expansion.
“At the rate in which Luno has grown, scalability that is offered by the AWS cloud is essential as we have the ability to elastically scale our services globally without consuming precious engineering resources,” Stranex explains.
“As Luno expands the team globally, the company will be rolling out more deposit methods and country localisation.”
Stranex said that the company is seeing fastest growth in its most recent market of Europe, albeit from a much lower base.
Luno’s expansion across Europe offers access to the Luno app for retail customers from (all) European countries from which they can fund their accounts (in Euro) and buy Bitcoin.
“There are not a lot of companies that offer these kind of services in Europe – and certainly not in a very mass-market, user-friendly way, and particularly with a really good mobile product coupled with good customer service,” he says.
Furthermore, Luno has competitive advantage by utilising AWS’s services to distinguish itself from its rivals. It also offer its customers an instant buy/sell product, where they can seamlessly convert between fiat and digital currency and vice versa, without having to navigate their way on the more complex trading platform.
So, AWS has enable Luno’s customers to be confident in its ability to meet the essential security requirements. The global cloud computing firm has also provided Luno with the ability to elastically scale its services globally without consuming precious engineering resources. Luno has also benefited from AWS’s data analytics that enabled the company to have the ability to analyse client data in real-time.
Running AWS services has enabled Luno to grow from 5 people in a small office in Cape Town. It is now one of the most popular cryptocurrency platform in South Africa and processes the majority of daily Bitcoin and Ethereum volumes.
It is also the first Bitcoin platform in Africa.
“Luno has historically been the largest and most established exchange in emerging markets partly because it is incredibly difficult for other companies to build reliable verification and funding mechanisms as well as securing the right partnerships in these markets,” says Stranex.