Detroit-based Benzinga, a media and data provider bridging the gap between retail and institutional investors, sent its team to Miami, Florida April 6-9 for Bitcoin 2022.
During that time, Benzinga sought to recognize the innovation in digital assets, broadly, and spoke with founders, investors and beyond.
The following is a conversation with Ray Youssef, the CEO and founder of Paxful, a global, peer-to-peer platform building a financial system for the 100%, one Bitcoin (CRYPTO: BTC) at a time. Check it out!
Q: Hi Ray, nice to meet you. Care to start off with an introduction?
Ray Youssef: I’m a startup and tech guy. I’ve had many startups – in the double-digits – and here I am in bitcoin.
I was born in Egypt and grew up in New York. I like building products for human beings and, actually, helping people. I have a crazy dream that everyone can be rich.
People don’t have to be poor for others to be wealthy; we can all have plenty.
I’m building a machine, a tool that humans can use to free themselves from economic apartheid and that is all built on bitcoin because I view bitcoin as the only honest money we really have.
Honest money will lead to peace.
How did you find bitcoin?
The first time I heard about it – 2011 – I dismissed it as nerd money. However, in 2013, I started to dig in and read the white paper.
I learned bitcoin could sustain itself and the incentivization model for miners impressed me.
This was a programmer and he designed a beautiful system, which is Layer Zero.
What humanity really needs is a civilization kit. You need to be able to take open-source code, fork it, and run your whole country. Most of the governance is about money.
Bitcoin is Layer Zero, Lightning is a layer on top of that for payments, and then you have other things like custody solutions, you can decentralize a company, and so on.
Tell me more about what Paxful is? What is the value of what you’re building?
Paxful is a peer-to-peer marketplace for money transfers where it functions as a platform for a wallet. In many ways, it’s basically bartering for money, fiat to crypto.
Crypto is used as a clearing layer and it becomes very valuable for arbitrage but, because of all of the liquidity everywhere in the world, it also can help a lot of normal people.
So, first, it’s about getting bitcoin to the masses who are unbanked. There are 40 million unbanked in the United States. Then, in Africa, there are a lot more unbanked.
Even people that have bank accounts in Africa can’t send money to the country next door. There is segregation and that’s what economic apartheid is.
So, they’re banked locally, but not globally. That’s where a lot of help is needed and once you show people how to use this tool, they’ll naturally start transacting and spread it to the hands of people around them.
That’s how you saturate a local economy.
How do you find out what the issues are, develop solutions and scale?
You have to do so on a grassroots level and it has to proceed within a certain order. You only know that order if you’re boots on the ground.
Talk to real people, listen to them, look them in the eyes and see what their problems are. Empathize with them and maybe they give you a gem – a problem that they have – or an opportunity to leverage a stronger trade route or whatever.
You can build on top of something that already exists and then, give you feedback about your platform. That’s one of the things I love most.
What are some of the core products and services that Paxful provides?
The first product, as we talked about, is the marketplace. It’s basically a listing service or listing of ads.
Someone will say: “Hey, I’ll put up a $100 Amazon Inc (NASDAQ: NASDAQ:AMZN) gift card but I want at least, you know, $85 in bitcoin,” and people will take you up on that.
There’ll be an escrow service – an arbitrator if necessary – and that money will go to people’s wallets at the end.
There are a lot of pieces that we’re building on top of that to streamline things like payments, remittances and the real use cases. Speculation is only one use case, and, unfortunately, it’s the one that receives the most attention.
People go to exchanges, often, to lose money. You go to places like Paxful to make money. Some earn a lot and it is steady because they’re creating a trade route and solving a problem.
Think if you could send money straight to anyone’s mobile wallet in Kenya and it’ll get to them instantly and they could spend it through M-PESA which is the first and top mobile wallet in Kenya or all of Africa, actually.
What if, instead of people losing 20% through transaction fees, they made a profit.
Why? It is because bitcoin is scarce in Kenya and people are willing to pay over market price. Through that, you make money cheap for everyone else in Europe, for instance, to send home and that’s the power of arbitrage and opening a marketplace powered by bitcoin.
Did you build Paxful all yourself?
In the first version, I designed the UX and UI. I did the admin for my database and some mid-layer code but I had a lot of help.
Documentation helped the process.
Talk to us about trends you’re seeing, as well as how you will position Paxful to take advantage of those trends.
We took a position on the ground and listened to the users.
Through that, we know what to improve and other products to build because bitcoin is Layer Zero. Now, we’ve got Lightning, but someone really needs to decentralize the company I built, Paxful.
If you have that and this OTC kind-of trading desk for everything, you can do anything.
You can trade anything for anything.
Anything else you’d like to share?
We’re not moving fast enough.
We need to get bitcoin, hard money, to the streets. I’ve been thinking about ways to accelerate that with the tools we have.
Tokens remain a way to improve and realign incentives which is powerful. I’ve never done a token or bought an ICO. There’s something here and it needs to be figured out because we need to get more bitcoin in the hands of normal people, faster.
People should be getting a UBI based on turning their time into money. People in Africa are young. Imagine if you put them all to work. The explosion of wealth would be tremendous.
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