London Block Exchange. What I like and where I’m curious
Tags: Lbx, Bitcoin, Cryptocurrency, Investing, Altcoins

I’m quite excited by the forthcoming launch of LBX, the London Block Exchange, which is due to start operating for registered users in early February.

For me it’s the fact they’ll offer a means of being able to buy a range of crypto assets in Pounds Sterling (GBP) which is key. From launch they’ll support Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Ripple (XRP).

What I like

Other than GBP support there are a few things I really like about LBX.

Thinking about the customer

While client demand may take this hard for them to keep on top of everything, I like the fact they have key roles on their executive team which demonstrate that they are thinking about the end customer, in terms of support and comms. A Head of Customer Success and Head of Marketing Operations are important positions here. They also have a People Advisor, focussed on how junior roles are filled. The team that this person helps build will be instrumental in terms of how they scale with demand.

There’s nothing ground-breaking about this, but so many exchanges make such a woeful job of managing investors that if LBX get this right it will make a big difference. (I write a bit here, in point 5, about why I think other exchanges have got this wrong.)

Educating the customer

Arguably the UK is behind other markets in terms of players in the crypto sector. And lack of customer care has made it hard for many British residents to understand how to invest. So, on that basis it’d be a fair assumption for LBX to make, that if they want to grow a customer base in the UK, then they they’ll be dealing with a lot of newbies, who need educating about blockchain technologies. Their learning resource — the college — does a great job of this. It’s got some fantastic content.

There’s also a daily market report which is sent out to all registered users too, which is a really great digest, and includes well researched links form a variety of sources. (Although I do need to chase up why, as a premium member, I’m not getting this first thing in the morning as promised. And it’ll be interesting to see if anyone from LBX picks up on that by reading this article!)

What I’m curious about

I’m curious about a few things too.

Roadmap

I’d love to know what the LBX roadmap looks like. Earlier in the week I got a call from one of their reps following up on an OTC (over the counter) enquiry I’d raised. I mentioned a feature I’d really like to see. He said he’d raise it with the dev team. They came back to me and said that will be deployed in Q2.

I’d have faith in this if it was an idea they had already, because then I might believe it was on the roadmap. But if Q2 has come back as a timeframe to an idea I’ve suggested that is new to them, then I’m a bit more sceptical. To be honest, when I asked the question I wasn’t expecting it to be entertained at all. I hope they are not just telling me what they think I want to hear.

It would also be useful to get an idea of what their regulatory roadmap might look like. Will they press for FCA regulation? Will they look to lead in terms of best practice to help placate government, HMRC, banks etc. They’d be well placed to do so, and those bodies are going to need the industry to lead I think.

Security

This is the big one.

So as far as I can ascertain their OTC service will launch before the online platform. Assuming OTC reps are using the platform to make trades, then it’s a good sign as far as some level of rigidity goes, because it shows the service is being used in the successfully wild, even if that is at a fairly small scale.

My concern however is how LBX, from a standing start, absorb quickly all the learns other exchanges have had to take on board in their years of trading, in current market conditions which everyone has found challenging. It’s a tall ask to expect them to get this right first time, and I think investors should bear this in mind, and proceed with some level of caution, in terms of how much money they tie up on the platform.

Obviously LBX aren’t going to publish their security strategy on their website, but I’d like to see more than the one liner of ‘extra layers of security to protect your training experience’ and more on say things like, will users have access to private keys, or how is cold storage managed etc.

While the CEO has got some level of tech background, I’d much rather see a CTO on the team page too, showing that development is the accountability of one person on that team in, say, the same way marketing is. A CEO of an exchange in today’s market is only going to have so much time to be all over the significant security considerations there will be.

One thing that is reassuring is that there’s a waiting list to sign up as a user to LBX, which hopefully means a cautious approach will be taken in terms of how they onboard investors on the system.

Market rates

The big advantage I’m hoping to gain as to as a UK investor in signing up for LBX is that I can save money in exchange rate and SEPA fees by buying, and taking profits in GBP. But if the rates and fees are poor that goes out the window. I guess time will tell!