Bitcoin 2022 Exclusive: Building a Financial System for 100%
Based in Detroit Benzingaa media and data provider that bridges retail and institutional investors, sent its team to Miami, Florida from April 6-9 to Bitcoin 2022.
During this time, Benzinga sought to recognize innovation in digital assets, broadly defined, and spoke with founders, investors and beyond.
Q: Hi Ray, nice to meet you. Do you want to start with an introduction?
Ray Youssef: I’m a startup and a tech guy. I’ve had many startups – double digits – and here I am in bitcoin.
I was born in Egypt and raised in New York. I love 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 rich; we can all have a lot.
I am building a machine, a tool that humans can use to free themselves from economic apartheid that is built entirely on bitcoin because I consider bitcoin to be the only honest money we really have.
Honest money will lead to peace.
How did you find bitcoin?
When I first heard about it – in 2011 – I dismissed it as nerd money. However, in 2013 I started digging and reading the white paper.
I learned that bitcoin could sustain itself and the incentive model for miners impressed me.
He 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 governance is about money.
Bitcoin is layer zero, Lightning is a top layer for payments, and then you have other things like custodial solutions, you can decentralize a business, etc.
Tell me more about what Paxful is? What is the value of what you build?
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 trading money, from fiat to crypto.
Crypto is used as a layer of compensation and becomes very valuable for arbitrage but due to all the liquidity everywhere, it can also help a lot of normal people.
So, first, it’s about getting bitcoin to the unbanked masses. There are 40 million unbanked people in the United States. Then, in Africa, there are many more unbanked.
Even people who have bank accounts in Africa cannot send money to the neighboring country. There is segregation and that is economic apartheid.
So they are banked locally, but not globally. This is where a lot of help is needed and once you show people how to use this tool, they will naturally start transacting and passing it on to the people around them.
That’s how you saturate a local economy.
How do you find out what the problems are, develop solutions, and scale?
You have to do it locally and it has to happen in a certain order. You only know this order if you are on the ground.
Talk to real people, listen to them, look them in the eye and see what their problems are. Empathize with them and maybe they’ll give you a gem – a problem they have – or an opportunity to leverage a stronger trade route or whatever.
You can build on something that already exists and then provide feedback on your platform. It’s one of the things I love the most.
What are some of the main products and services provided by Paxful?
The first product, as we talked about, is the market. It is basically an SEO service or an ad listing.
Somebody say, “Hey, I’ll put $100 Amazon Inc. AMZN gift card but I want at least, you know, $85 in bitcoins,” and people will tell you about it.
There will be an escrow service – an arbitrator if necessary – and that money will go into people’s wallets at the end.
There are a lot of things we’re building on top of that to streamline things like payments, remittances, and real-world use cases. Speculation is just one use case and, unfortunately, it is the one that gets 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’s stable because they create a trade route and solve a problem.
Think if you could send money directly to anyone’s mobile wallet in Kenya and it would reach them instantly and they could spend it through M-PESA which is the first and best mobile wallet in Kenya or all of Africa, in fact.
What if, instead of people losing 20% to transaction fees, they made a profit?
Why? This is because bitcoin is scarce in Kenya and people are willing to pay more than the market price. Through this you earn cheap money for everyone in Europe, for example, to send home and this is the power of arbitrage and the opening of a market fueled by the bitcoins.
Did you create Paxful yourself?
In the first version, I designed the UX and UI. I did my database administration and middle tier code, but got a lot of help.
The documentation made the process easier.
Tell us about the trends you see, and how you will position Paxful to take advantage of these trends.
We took a stand on the ground and listened to users.
Thanks to this, we know what to improve and other products to create, because bitcoin is layer zero. Now we have Lightning, but someone really needs to decentralize the company I started, Paxful.
If you have that and that kind of OTC trading desk for everything, you can do it all.
You can trade anything for anything.
Do you have anything else to share?
We are not moving fast enough.
We need to bring bitcoin, the hard money, to the streets. I’ve been thinking of ways to speed this up with the tools we have.
Tokens remain a powerful way to improve and realign incentives. I have never tokenized or purchased an ICO. There is something here and it needs to be understood because we need to get more bitcoins into the hands of normal people, faster.
People should get a UBI based on turning their time into money. Africans are young. Imagine if you put them all to work. The wealth explosion would be enormous.