Why is this (mainly) about Luno?
Pretty much because it's what I know and it's working really well for me right now. It's simple to use and it doesn't throw the verification issues that Coinbase did.
DISCLAIMER
I want to start by putting it out there that I am still extremely new to how everything works, but I do want to share with you a story of what happened to someone, and what I know today, as well as how to do things (a mini how-to-guide).
I am not a financial adviser, do not take any action from only reading what I have written here - do your own research and make sure you do what is right for you.
Catastrophic investment failure and loss of life
On Friday I was at work speaking to a colleague about cryptocurrency and telling him how excited I am that Luno has now added additional savings wallets where you can earn interest. Initially it was only Bitcoin where it was possible. You can now earn interest on the USDC and ETH as well. I hope that it won't be long before they begin with a Bitcoin Cash interest account as well.
Anyway, back to the point of this post. The gentleman I was speaking to is in his seventies and he just shook his head saying that cryptocurrency is "dangerous".
I asked him why...
He told me about a friend of his (also in his seventies), who went to the bank and took out a personal loan for R300 000 (roughly $20 000). He then went and bought Bitcoin with ALL the money. A couple of months later the price had plummeted into the floor and he couldn't pay his bills any longer. He ended up committing suicide and his family lost everything - because it wasn't just the loan he used, he used their pension as well.
I have always said from the start of my cryptocurrency journey - this is a long term investment - this isn't a get rich quick scheme. You cannot invest that type of money in something as volatile as these markets and expect to be a millionaire overnight. If you have that type of money laying around and you are in the top end of the rich people of the world then it's a different story. However, the average person doesn't have that type of money and we certainly shouldn't be investing like that in ANY cryptocurrency.
It's a little like gambling with bread and milk money - you don't KNOW what the markets are going to do. Just the same as you won't go and take out a loan for the casino for $20 000, you shouldn't be taking out a loan for cryptocurrency.
That's my opinion.
Let's talk about Luno
I want to show you some screenshots of my journey from the start.
It is 14/03/2021 and currently I have R2162 in the account. I've left the times in the screenshots from my phone so that you can see exactly how quick this process is. You will notice I have R286 available which I can purchase cryptocurrency with via the Luno app. I want to increase this figure so that I can begin purchasing and potentially selling at some point.
This is what the savings accounts look like:
Basically once you've bought Bitcoin, you can then transfer it into your savings account which is what I've done this morning. The process is really simple. You tap the BTC IN and then it asks you how much you want to transfer. You write the figure that you want (in BTC) and then you say yes and accept it.
This is my history of purchases, I wanted to show you this because I was not particularly smart when I began with all of this and did multiple transactions. I was also very weary of it all and wasn't certain about putting my confidence in this platform at all. Hindsight is a wonderful thing, however at least this gives you an idea of my total earnings based on what has been put in (keep in mind that BTC has NEVER been this high before and I am pretty certain at some stage it will drop and my account will look sick compared to the money I have put into it). As you can see below I've deposited a total of R1500. My current total wallet is R2162.
Part of the reason for the R662 profit is due to the increase in value of BTC, but it's also because I've been earning Bitcoin Cash through read.cash (thank you!) and also from noise.cash (super thank you!!). I've also been earning bits and pieces through other means - but they are certainly not enough to even warrant me commenting on their "effectiveness". They are not worth the time and are a total pain - I started on the one platform and couldn't stop until I'd reached a certain amount of Satoshi "built up", otherwise it would have just been a waste of time. But alas, I should be paid out on Tuesday so let's see how that goes.
I DO NOT RECOMMEND ANY FAUCETS!! I've learned my lesson.
Anyway, back to important stuff!
You CAN afford to invest IF you plan!
A cup of takeaway coffee I like costs R43 here. I used to get one of those twice a month. February + March is R43 x 4 = R172. That's extra money I saved because I didn't buy those coffees. I also have cut back on other "treats" to ensure I keep money to save so I can keep investing.
Walking you through how to buy via Luno
Again, I've kept the screenshots with the time imprints so you can see exactly how quick this process is. I can't show you each and every step because for obvious privacy reasons my bank won't let me screenshot during the transfer, but I can show you most of it and explain the rest of it properly.
On the main screen you tap the little figure which shows you your available (insert currency - mine is Rands). You insert how much you want to put in and then tap next.
Once you've done that you can then choose how you want to pay. I'm glad that my bank is part of the PayU accepted places because it's incredibly easy and almost instant. You tap on your bank's logo, and then it opens up a version of your banking app. It asks you for the missing letters of your online-login password, you input it. You get a push notification from your banking app which says you then need to verify the transaction. These requests always come through as a suspicious transaction (that was part of the reason I deposited separately when I started because I was terrified that someone was about to steal what I had in my account).
You can see in the above screenshot and compare it with the below screenshot - the deposit of your actual money is SUPER quick. Including password input and bank verification and and and - it only took 3 minutes for the money to be transferred and available. You'll also see in these pictures that I'm using my cell phones data, not the Wi-Fi in my house. This is because although I have fibre - it's dodgy as hell sometimes and I do not want to be interrupted during my transaction if my signal drops, and my phone's data is normally perfectly stable. I suggest doing this as well if you are in a similar position with Wi-Fi that drops a lot.
You can now click on any of the currencies available via Luno and purchase them. I've decided not to do this now, because the market isn't right to do it. You need to buy low and my plan is to make sure that I'm going to get that opportunity (whether it's in a couple of hours, or days).
I've downloaded The Crypto App:
What is really nice about it, is that it doesn't ask you for any of your details and bla bla bla. You just download it via the Play Store and start using it. I've set up alerts for ETH and USDC so that when it goes above and below certain rates my phone starts sounding off. I can then take a look and see which currency I'm either going to buy or sell. Right now, my chances of selling anything are pretty small (but I would like to give it a try). I'm working on increasing my total purchases to hopefully get to a stage where the interest I'm earning on things is going to be substantial enough to pay for a couple of monthly expenses.
Earning interest in Cryptocurrency
Seriously, could there be anything better?!
For me it is great because nobody has a lot of money to throw at buying large amounts of crypto. By leaving the money in there, you can just keep accumulating it and there is (technically) no risk if you believe what I do based on what I've been learning. The fall is inevitable. We don't know when it will happen. Someone could come out tomorrow and say BTC is bad and because they're influential everything will just go to nothing. However - it WILL come back up again. Whether it takes a year, two years or 5 years. When it hits its next high it's going to be even more than today. (Just my opinion)
Substantial Risk
The "down" side to earning interest via Luno is that it does come with risk.
They are offering 4% interest on ETH savings and on BTC savings wallets.
On the USDC they are offering up to 7.6%.
According to the Business Insider South Africa, and Luno's own terms and conditions they are basically saying that they take no liability for their investment partner (the people Luno hands your savings money over to in order for you to earn interest). What it means (to me), is that if the savings partner called Genesis Asia Pacific Pte Ltd, if they screw up - we could all lose everything. Not just the interest, the entire set of crypto which we have there.
Is that a risk worth taking for me? Yes. I'm not using bread and milk money.
Is my money SAFER in a regular bank with regular interest rates, terms and conditions? Yes, it definitely is - you can get insurance for that type of thing, it's regulated, it's stable, it's trusted. For the crypto - you're on your own.
Do I foresee any issues?
Nothing is glaring at me based on the following:
According to Luno and Genesis, Genesis has been operating since 2013, this means that they are well established - I feel like if they were going to throw people's money down the toilet it would have happened by now and there would be massive warning signs across the internet when I search their company.
Do I like the fact that they could blow every cent I've handed to them?
NOT AT ALL! But, and here's the big BUT! I can get a really nice interest rate, and I can earn interest in crypto and that's a risk I'm prepared to take.
Will I keep ALL my savings in their savings wallets?
Definitely not. I'll keep it liquid in the other wallets.
My final thoughts
Thank you for reading this! I hope some of it has helped someone in some way.
Happy earning everyone!
Image from Pixabay user (above and main image): dapple-designers
