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When you build an app, you usually want it to go viral. If you’re ambitious enough, you want millions of users around the world to enjoy your product. Sometimes your dreams come true when you least expect it. Last week, we’ve launched a referral program that went viral. At first, it made us happy… then, it turned out to be a real headache, slowing down the app performance, and in some cases even causing a temporary collapse.
At Crypterium, we don’t hide our problems, we face them and work hard to fix them. Today, we’d like to address some of the issues that haven’t been working so well in the last couple of weeks and reassure you that we remain strongly committed to providing you with the best wallet service in the entire cryptocurrency industry.
For nearly two years, we’ve been building a series of products we all wanted to use — an app that makes any interaction with cryptocurrency easy, and a card that makes digital currencies as liquid as cash. A couple of months ago we realized that these products were good to go and launched our first user acquisition campaigns across social media channels, ad networks and other resources.
Our active efforts to increase the Crypterium user base have been paying off remarkably well. Ok. Hold on cowboy… We’re not going to disclose the exact numbers at this time. But the chart below illustrates pretty accurately what we’re talking about.
We were growing across the globe and felt like rockstars. Here’s the deal: no other cryptocurrency wallet on the planet is operating in as many countries as we are. Not Coinbase, not Blockchain.com or any other wallet. Crypterium currently has users from 226 countries out of 249*. Yes, seriously.
No, we weren’t just ‘happy’ with the user acquisition campaigns. We were thrilled. Not only we were gaining users all over the world incredibly fast, it was costing us less than expected too. Suddenly, our million-user-dream was closer than ever before. That’s maybe because our ‘ads guy’ is a master in targeting, but it also means our wallets really sticks with people.
So, what do you do when there’s no speed limit? You keep going faster. And that’s exactly what we’ve done. If it weren’t enough, we added yet another tool to grow faster — a referral program. It gave our users an easy way to share their favorite cryptocurrency wallet with friends and earn rewards. As it turns out, we weren’t really ready for what’s coming next.
In only a couple of hours after its launch, hundreds of scammers began signing up on Crypterium trying to verify their profiles with fake identities to receive a $5 bonus. In just two days we almost broke the monthly average of registrations.
The sudden increase of registrations overloaded our servers, causing some delays on sign in and certain features of the app. It was the tip of the iceberg.
Our team of developers quickly implemented ‘horizontal scaling’. Simply put, we’ve added more servers and computational resources. Yes, it helped. Users could log in and use the app normally. But the happy faces on our developers didn’t last long as we encountered the next problem: software throughput.
Throughput refers to the rate of transactions our system can process in a given amount of time. Given the rising number of users and therefore transactions on the blockchain, our team was forced to temporarily suspend some features.
After updating our blockchain settings, we’re now able to process a greater number of transactions without incurring on delays nor downtimes. In parallel, we’ve decided to address the root cause of this viral mess: our referral program conditions.
Our desire to grow fast ended up costing us big-time. When we realized that the conditions of the referral program did not prevent bounty hunters from joining, it was simply too late. Scammers were downloading the app, spending under 3 minutes on it to complete our ID verification process and tadam! They were receiving the $5 bonus.
The process was so easy that bounty hunters all over the world began to join. Our systems were processing hundreds of downloads from single IP addresses and some pretty weird KYC requests. As a startup in the cryptocurrency market, it’s already difficult to establish good relations with traditional financial players. So, we had to get rid of that bad traffic fast.
“We work with many partners, from banks to card issuers and it is imperative that we do not let any bad actors slip through our control net and end up at their door. Remember the existing financial services world wants crypto to fail. We issue the only global payment card in the entire crypto industry, we can not give any reasons to let their negative wishes come true. That results in us being temporarily a little tougher than normal, but as we learn we will adapt to a model that works for everybody,” explained Crypteirum co-founder Austin Kimm.
That’s not what you hope for when you’re launching a referral campaign. To ensure only REAL users join us, we added an extra layer: a crypto-to-fiat transaction worth over €50.
Sure. It might be less salesy and certainly less viral, but it’s the right way to do it. Overall, your referees can still get the $5 bonus once they have successfully verified their profiles and executed a transaction in the app.
We’ve tried to fix everything asap, but it still was a painful experience that caused a lot of frustration among some users. Yet, we’ve learned valuable lessons out of this situation.
Never underestimate demand for your product. Prepare for scaling and double check you’re ready to see higher volumes that you hoped for, even in your wildest dreams. And remember the community is your strongest source.
Advertising has effectively introduced thousands of users to the Crypterium Wallet, yet it simply couldn’t give us the influx we’ve seen with the referral program.
The second lesson is that communication is the key to keeping your community happy. Don’t be afraid of telling your supporters something has gone wrong. Focus on fixing it, not hiding it.
We’re probably late with this explanation, but you know what they say… better late than never.
*According to the ISO Standard List Country Code 2019 | U.N. members: 193; U.N. observer states: 2; States with partial recognition: 2; Inhabited dependent territories: 45; Uninhabited territories: 6; Antarctica: 1; Total: 249