In this lesson's episode, explore how trust in crypto changes after exchange failures and why users move towards self-custody and secure storage. Discover how speculation distorts crypto's purpose while real value lies in payments, applications, and decentralized networks. Understand how simpler onboarding drives adoption and uncover how security and usability must be balanced for mainstream use.
Do you find that, because you're sort of boots on the ground, so I don't want to make assumptions, but do you find that more people are still keeping their crypto on the spot where they bought it? Or do you see user adoption to hardware, people understanding security better?
No, we've seen people understand money, so they don't want to lose their money. So now, a lot of people lose money, but after FTX it's like, when you burn yourself, you don't touch the flame anymore. So FTX was a big earthquake, I think. Much bigger than Mt. Gox or all of these things that happened in the past. And by the way, they keep on happening and they will keep on happening. FTX was not the last. The same way that Lehman Brothers was not too big to fail. Why would you trust a central authority with your money? Use it. I mean, exchanges are very useful. You should use them to do the trade, but you should never leave your coins on an exchange. And so I think people understand that and we've seen this in our numbers. It was a hard way to learn, but it was a way, and you see it in the coins moving from exchanges to somewhere else, and we see a lot of coins moving to our platform. And then we see a lot more people now are engaging with the services that we have in Ledger Live, especially the buy, sell, and swap services. And the numbers are very impressive year on year. Triple-digit growth very constantly in Q1, continuing in Q2 when the market is definitely not doing triple-digit growth. No, not at all.
So you see you're not even taking over people that are very, very adamant crypto users. You still are you're bringing people in who's never used crypto before even in a...
On the transaction thing, what I'm describing is more like our user base now understand that they can do more with Ledger than just store the crypto, and they prefer to do the trades from the Ledger rather than from the exchange.
Understood. So they keep it in the ecosystem.
But do you also see people like you still see, of course the industry is not growing at triple digit growth, but do you also see people that are entering crypto with Ledger versus entering crypto with Coinbase and keeping things on Coinbase?
Oh yeah, for sure. And actually more and more, first of all before in 2017 it was not possible. So you had to do Coinbase first and then Ledger second. Um, in 2023 now, first of all it's not just cryptocurrencies but it's also NFTs. So sometimes you enter through an NFT and not really through crypto. You can go on up and see, take your credit or debit card and then MoonPay is providing the service and then you buy your NFT and then you have to put it somewhere. And actually through the payment service, MoonPay will ask you where do you want to put it, and so it could be on your MetaMask, could be on your Ledger, etc. And so yes, more and more actually what we've seen in 2022, when everybody was saying it was a bear market, we saw that sure on certain things, certain things were not flying as high as they would have had in the past, but other things like the NFT business and those communities being built around those projects kept on growing, and so that brought a lot of people in, that brought a lot of Ledgers.
And what do you, you know, now again you see people that are older crypto users as well as new crypto users using Ledger for all the transactions they want to take care of. What do you think is the key to user adoption? Do you think that there is unfortunately the requirement for more FTX type things that, and actually not for user adoption, so that would be migrating people over that are already crypto users, but let's say bring new people in. So FTX pushes people away that never touch crypto, makes them scared, they say 'Oh thank goodness I never bought any crypto because look at what just happened.' But on the flip side of that, what is the key to user adoption?
Okay, but first I think so far everybody got it wrong to think that speculation over coins was actually crypto. I mean, it is not crypto to speculate on FTT on FTX. That's like the worst of financial speculation, I guess. And if to you crypto is just like buying an Apple stock, I mean, sure, you can do that, but I don't think it's the use case for crypto. And by the way, the token only has value if you bring security to the blockchain and if the blockchain has a vibrant ecosystem of developers, companies, applications, etc. that are built on top of it. And so I think that the market is just taking care of speculation. They're not looking deep enough into the protocols, etc. And it's difficult because you had so many meme coins that have no value, but it's just people pumping and dumping the market, that makes the whole speculation aspect of crypto a bit ridiculous, if you want my honest point of view. I think where crypto is interesting is if it's in self-custody, because this is why and how it has been designed. If you're to leave your crypto at a bank again, sure, but why? There are other things that you can invest in that are probably good investments. And yeah, so the interesting thing is what you can do with your private keys and how you can engage in products that are interesting, like DeFi is one good example. If you don't have your private keys, you cannot really engage in DeFi. We always overlook payments as if it's a given, but I still think that store value and payment with Bitcoin or Lightning or payment in general with crypto is the killer app. I mean, you have a peer-to-peer global payment network.
