Paxful, a peer-to-peer marketplace that enables anyone in the world to buy, sell and accept bitcoin instantly recently launched its services in Kenya and the greater East Africa.
In just 3 years, Paxful has become one of the world’s leading peer-to-peer Cryptocurrency marketplaces built on open source bitcoin and blockchain technology.
Boasting US$15M in bitcoin global transactions per week and more than 2 million users, the rapidly expanding platform has solidified an enviable reputation for security and efficiency.
Founder360° sat down with both cofounders in a bid to find out more on their recent strategy of expanding their operations across Africa and much more.
Tell us about your background and a little more about your team.
Ray: I’ve been an entrepreneur now for about 15 years. My first two startups were very successful. After my successes, I retired for a little bit but had to come back because of a few personal reasons. I started doing startups again and I went through 11 failures before Paxful. I was actually homeless in New York City for a while and none of my friends knew, which was rough, to say the least. On the 12th try, I got Paxful.
One of my friends turned me to bitcoin and I was shocked that you can actually make 100% profit by selling gift cards. I didn’t really believe him at first but I tried it anyway since I was kind of desperate. It was then and there that my co-founder, Artur, and I decided to create a platform so that other people can make money as well. Since then our team has grown immensely with offices in Estonia, New York, Philippines, and, Hong Kong. The teams that are spread throughout the world are what make Paxful what it is today: a leading peer-to-peer bitcoin marketplace.
Artur: I have been in the Tech industry for 8 years. When Ray and I started Paxful, we wanted to make Bitcoin as easy as possible for people. To make the technology accessible and to spread the benefits of peer to peer finance as much as possible. Now that we have a much bigger team, we can and will continue to work towards that goal on a bigger scale.
What do you think has fueled the growth of cryptocurrency, in particular, bitcoin around the world and more so in Africa where you have significantly become operational?
Ray: What fuels the growth of cryptocurrency, is the potential it has to help people all around the world. In my case, being homeless in New York, gave me firsthand experience of what it’s like to have nothing. Crypto helped me become financially stable and make a living to help myself and my family. When Artur and I founded Paxful, we had one goal in mind: to make bitcoin easy for everyone. If bitcoin were to be easy for everyone, then it could help a lot of people that are struggling financially.
This is exactly what we’re doing all over the world, most especially in Africa. Instead of saving up to buy Lambos, we decided that we can make a real difference in people’s lives. By building schools in Africa and by providing them with clean water, then we can provide a better life so that they can grow to their highest potential. Nigeria has had 90% inflation over the past two years and the majority of the population are underbanked. Paxful can help with that.
I also believe that Africa can actually become a leader in the P2P financial system because of their potential and their will to change the way they live. I’ve seen a natural entrepreneurial drive in Nigerians that is absolutely astonishing and inspiring.
Artur: Inflation and the declining value of their national currency is one. When Bitcoin first came out, no one knew what it was. Now that a lot more people know what it is, it gives everyone the opportunity to help those in need. Africa, a severely underbanked continent that’s experiencing a high amount of inflation, has now seen the potential good of what bitcoin can do. Schools and clean water supplies are being built over there through the power of bitcoin. Our goal is to reach all countries that need help and do what we can.
For any newcomer in the cryptocurrency business, what kind of impact do you intend to achieve for them especially considering that we still have fewer or insignificant local businesses that accept bitcoin as a form of currency?
Ray: Don’t treat bitcoin as an investment, treat it as a tool that you can use to help. With Paxful, we always aim to make things easy for any newcomer with several in-depth tutorials on how to use the site and a great 24/7 customer support that can answer any questions that you may have. To the newcomers, bitcoin trading can seem a little intimidating at first, but trust me, it’s incredibly easy and extremely profitable.
Artur: If more business will adapt to the use of bitcoin and cryptocurrency, everything will be easier. A lot more people will have the opportunity to take charge and control of how they use their money. I want every newcomer to see that trading through Paxful can be very beneficial for their own personal lives, even if their local business still doesn’t accept bitcoin as a form of currency. The kind of impact I want our users to have is that bitcoin is here to stay and can do a lot of good for mankind.
There are many cryptocurrency marketplaces in the market today, what makes Paxful distinctive especially in Africa?
Ray: What makes Paxful distinct from other cryptocurrency marketplaces is we are peer-to-peer. Meaning, we provide a marketplace for people around the world to trade and translate whatever they have to money. Paxful is a universal money translator. Anyone has the power to control their own money as long as they have a connection to the internet. We build our website to cater to those who might feel a little intimidated by cryptocurrency, showing them that it’s easy and if they’re confused about anything, I believe that we have the best customer support team in the game. They’re there to answer any questions you have no matter where you are and no matter what time it is. The simplicity of how to use it is what I believe makes it appealing to the people in Africa.
Artur: When we founded Paxful, Ray and I have always wanted to make it as easy as possible for anyone who wants to trade bitcoin. The peer-to-peer aspect of Paxful is surely remarkable. We assume a role of a bridge from a person selling his iTunes Gift Card to another person across the world who is looking for iTunes Gift Cards in exchange to bitcoins. Paxful provides an express highway for them to get the right offer right away. Paxful excels in its simplicity and even if people don’t understand how it works, there’s a long list of knowledge-based articles and the best customer support team in any exchange. Paxful is extremely easy to learn and use.
What are some of myths and misconceptions that people have on cryptocurrencies like bitcoin?
Ray: A lot of people are intimidated by cryptocurrencies at first. Mostly, they say “Bitcoin is a bubble” or “Its a scam.” We’ve seen so many users use bitcoin and Paxful in their daily lives that those no longer apply. I do customer support whenever I can and talk to the users – I hear stories of how they send money with their Paxful account to their family ‘cause it has cheaper fees.
Artur: A lot of people get into crypto for instant 100 times return and the Lambos, those are mostly people from the western countries (USA). But, Africa, you are leading us in understanding the true cases of bitcoin and Paxful. Some are utilizing bitcoin for wealth preservation while others for payments and importing. Swings of the price really don’t matter in this case, what matters is the liquidity of bitcoin and ease of use to buy it or sell it.
What kind of partnerships have you made since your entry in the region or better yet, what are you looking at in regards to partnership in the region?
Ray: First of all, we look for opportunities where the use of bitcoin can hugely impact the lives of the people in that region. Like with what we did in Rwanda with ZamZam Water, we want to help the less fortunate communities, giving them a chance to better their own lives. It doesn’t stop with Rwanda though. We aim to target all regions in which we believe bitcoin can change lives for the better.
Artur: ZamZam Water comes to mind. The partnership that we had with them was so fruitful as we were able to help build two schools in Rwanda fully funded by bitcoin. This is one use case of bitcoin and Paxful, it’s more than just trading – we can instantly transfer funds to a good cause that we want to help across the globe.
Considering that you are in an industry where scams are inevitable, what are the legal and security measures you have put to protect your users?
Ray: Paxful has a lot of features that prevent people from being scammed. Obviously, there are still people out there that will take advantage of the honest users but we try our hardest to single the scammers out and prevent them from using our platform. On Paxful, we have zero tolerance for scammers.
An example of the features that prevent scammers is our escrow system. By having a third party hold the coins until the deal is done, it makes it much harder for scammers to get through the system. This is why we want to educate our users and make it easy for them to trade as much as possible.
Artur: Our bonds and escrow system are features that try to directly protect our users from scammers. It’s a huge challenge to get all the scammers out there, but we can assure everyone that we try our best to remove them completely. We also have a dispute system that helps honest users when it comes to dealing with potential scammers. But there is an extent where Paxful can help with scammers, our users have their own responsibilities when it comes to trading and dealing with scammers.
Is Paxful looking forward to including other cryptocurrencies like Ethereum in the near future? What would inform your decision?
Ray: Although bitcoin remains as the main cryptocurrency that Paxful deals with, Ethereum and other cryptocurrencies can be bought on Paxful. They’re listed as payment methods on Paxful which means you’re able to trade bitcoins for cryptocurrencies like Ethereum.
Artur: Not directly but buying Ethereum and other cryptocurrencies are possible on Paxful. They’re listed as payment methods. What you do is if you have a gift card that you want to trade for a different cryptocurrency like ether, then you’ll have to convert the gift card into bitcoins and then trade the bitcoins into ether.
What would you describe as your biggest achievement you have made since launching Paxful 3 years ago?
Ray: I believe that our biggest achievement, aside from Paxful achieving 2 million users, is being able to make enough money to help people in need. What we’ve done in Africa with ZamZam Water has to be one of the biggest achievements of my career – building schools and providing a clean water supply means so much to me and Artur.
Artur: There’s a lot that we have achieved in the last three years, but I have to say that the biggest has to be the #BuiltWithBitcoin campaign that we have launched. This campaign will allow people to see that the potential of bitcoin is beneficial not only to the individual, but it could also be beneficial to society. Hopefully, people will see the good that bitcoin can do and will be encouraged to help out.
Also, the website is undergoing a huge update, we are excited about that. We believe that the website redesign will help a lot of our users more. We have several huge projects brewing and almost ready to release.