This is an excerpt. To hear the full interview, please click the Soundcloud or Youtube links.
Most of the public narrative around Bitcoin these days has to do with industry adoption and major investors–in other words, how crypto can be used to make ‘big money’ and major institutions even bigger.
Still, there are some individuals who are dedicated to making Bitcoin more accessible to those who may need it the most: the world’s most impoverished and underbanked individuals–those who don’t have access to the “formal” global economy.
Recently, Finance Magnates spoke to Paxful’s co-founder and CEO, Ray Youssef. A proud Bitcoin maximalist, Ray believes that BTC is the key to empowering some of the world’s most financially alienated populations. He told us about his fascinating journey across what could be described as several lifetimes: from an overnight start-up success, to homeless on the streets of Manhattan, to co-founder and CEO of Paxful.
“We Focused on Helping the Unbanked”
Paxful was born when Youssef and his business partner, Artur Schaback, decided to turn their homegrown over-the-counter Bitcoin exchange operation into an official company.
“It was technically the same as LocalBitcoins, which is a solicit service and an escrow service. It wasn’t local–there were no local trades allowed. It was like ‘GlobalBitcoins.’ We focused on gift cards and helping the unbanked.”
— Paxful (@paxful) June 7, 2018
Youssef explained that although Paxful was enough to get him and his partner off of the streets, the real ‘a-ha moment’ for Paxful didn’t come until a fateful customer service call with a rather desperate woman who was trying to use her last $20 to buy Bitcoin. Without a bank account or credit cards, Ray navigated her through the process of purchasing a gift card and locating a trader who would accept a gift card trade for BTC. “She cursed the daylights out of me,” he said.
“I walked her through the whole transaction. That was a real eye-opener for me,” Youssef explained. “You know, us crypto-geeks think ‘oh, Bitcoin is so easy.’ But–first of all–getting your first Bitcoin as someone who has no bank account was impossible back then…Coinbase isn’t going to help out someone like that.”
“An Army of People”
“The phone calls didn’t stop,” he said. “It was like an army of people.” Ray found himself assisting tons of US-based people with no bank accounts and no computers–more often than not, they were conducting their transactions on Android phones. “I had no idea these people even existed,” he explained.
Youssef and his business partner soon realized that they needed to redo Paxful’s platform. “It was the first time that real people–not techie people–actually needed Bitcoin for an actual utility, for a real purpose…overnight, Paxful became the place for the unbanked and the ‘normal people’ to get their Bitcoin.”
This had another, unintended effect. “All of a sudden, Nigeria started popping up on our radar. We were like, ‘woah woah woah, what? Why are all these Nigerians on Paxful?”
Liquidity Constraints in 2021 – What is the Best Path Forward?Go to article >>
The answers were actually quite simple– “wealth preservation (their currency has gone down by 90%); being able to buy stuff online, because they have huge limits [on debit/credit cards] over there…these folks have a lot of issues. We saw that yeah, the unbanked in America have it rough. But if you’re unbanked outside of America, it’s even worse, because you’re completely segregated from the world economy.”
”All-In on Africa”
“They came to us because our system had been made for them–we just weren’t aware of their issues, and now we were. And then we said, ‘okay, let’s go all in on Africa. We can actually help these folks get on equal footing–we can give them a global financial passport that they can actually use. Like, the United Nations should be giving each one of these folks a Bitcoin wallet and teaching them how to use peer-to-peer finance.”
“At this point, we began to see the bigger picture. The people of Africa were educating us. It really wasn’t just Bitcoin and Paxful–it was peer-to-peer finance. These folks were finding ways around all their barriers–whether foreign or domestic–using peer-to-peer finance.”
Its time to stand up and fight back. Stop feeding banks thier fees, and start finding ways to use bitcoin instead. Power to the unbanked, and the de-banked. @paxful
— hank (@DaggerHank) April 21, 2018
Ray said that there are three building blocks to create the peer-to-peer ‘revolution’ that he sees happening in Africa right now. “Bitcoin was the peer-to-peer cash system, that’s the first building block. The second building block is this community around Bitcoin…it creates liquidity. People want to buy Bitcoin to get in on the amazing profits and wealth creation, and other people want to sell them so they can pay their bills. The third thing is a peer-to-peer marketplace (like Paxful).”
“The same thing that Uber did for transportation and Airbnb did for hospitality, peer-to-peer financial marketplaces are doing for finance. We’re letting people solve other people’s problems,” he explained.
”Nodes of Prosperity”
Ray said that to move BTC forward (especially in the developing world), we have to question the stories that we tell ourselves and each other. “The narrative that we hear in the Western world [surrounding Bitcoin] is often skewed. If we’re talking about Bitcoin, we’re either talking about Silk Road, or massive speculation and scams. There’s a similarly skewed narrative with Africa. When we hear about Africa in the western world, all we ever hear about is poverty, disease, and corruption.”
“There are those things in Africa, of course–but what gets me is that they never give you the other side of the story,” he said. “There are many young entrepreneurs who have the means, have the resources, have ambition, and are very well-educated and want to build businesses, want to help the world. Those</em are the people that Bitcoin is going to help, because they can help themselves.”
“When you help them help themselves to build their own businesses and create their own wealth–and get Bitcoin in to the hands of people around them–you’re making ‘nodes of prosperity.’ They will hire their friends and family, and then bring in other people. That’s how it starts.”
Paxful has gotten involved with a number of start-up efforts and charitable ventures throughout Africa, including the #BuiltWithBitcoin project. Last week, #BuiltWithBitcoin announced an initiative to provide scholarships to Afghan refugees.
— Paxful (@paxful) June 15, 2018