Bringing the crypto payments ecosystem around the world: Ray Youssef
Though he has had 11 business failures, today Ray Youssef is building Bitcoin-funded schools across Africa as executive director of the Built With Bitcoin Foundation and is helping millions of people buy and sell cryptocurrency as CEO of Paxful. However, Youssef also admits to looting hardware stores on behalf of a convent school after Hurricane Katrina and says he was nearly shot as a suspected CIA agent during the Egyptian Revolution.
He has just returned from El Salvador, where he spent time at Bitcoin Beach — where he says even children are using Bitcoin (BTC). Crypto payments services are important there because 70% of people in El Salvador have no bank account. For Youssef, peer-to-peer financial networks spell hope for the developing world.
All roads lead to Bitcoin
When Youssef first heard about Bitcoin in 2011, he quickly “dismissed it as nerd money.” He had more pressing things on his mind, as that year he left the relative comfort of New York to support the revolution in his native Egypt. There, he went to the core of the protests at Tahrir Square in downtown Cairo and “nearly died on the first night of really crazy fighting” during which he was arrested by the military as a suspected CIA agent. “I could write a book on that one night alone,” he concluded with a laugh that exuded mystery.
He’s not the first crypto leader to throw themself into a revolution — like Griff Green, who once protected polling booths in Catalonia, or Amir Taaki, who went to fight with the Kurdish YPG. After he returned home to the United States, however, he began integrating his experiences of the revolution and questioning many things about society.
The energy in Nigeria will transform the world. The youth have already begun building a pan African financial settlement layer using #bitcoin and nothing can stop peer to peer. Africa is now leading the new world of finance and crypto adoption. Let us all show them love https://t.co/kTSFDdYwUl pic.twitter.com/uufSnLKUZz
— Ray “Adewale Uwaifo” Youssef (@raypaxful) June 12, 2021One of the rabbit holes he descended was that of money. “I started asking questions about money: Where is it? Where does it come from?” he said. Soon, he “began to see history through a very different lens.” That’s when he returned to Bitcoin, where he felt he could find answers.
It seems that crypto attracts revolutionaries, perhaps backing the idea of a technological or financial revolution brought on by blockchain. As he arrived at Bitcoin Center NYC for his first meetup in 2013, he wondered about the other Bitcoiners: “What are they like? Are they on the same journey that I am on?”
Describing the event, he sounded not unlike a pilgrim recounting a tale of a faraway shrine where they’d hoped to find other seekers of truth. The first person he met, Artur Schaback — his soon-to-be business partner — was the only other tall guy in the meeting, “So we got along, and we really bonded over the belief that Bitcoin could help the little guy.” Soon, they started working on a Bitcoin retail solution, but it was no easy ride.
“We ran out of money — we had to choose between our startup or a place to live.”The two adventurers “ended up homeless, surfing couches.” Youssef felt he had hit rock bottom, and he needed to ask for help — he was terrified of his mother finding out about his situation. He fasted for a month, and he prayed. “I had to be truly humbled and really begged God for help — I was broken, defeated, and I got a very special night — it was the Night of Power of Ramadan,” he recalled solemnly. Whatever he experienced then, for Youssef, it represented a turning point.
Youssef initially moved to the U.S. with his family from Egypt when he was 2, and by 8, he was already working odd jobs. He studied history at Baruch College in New York starting in 1996, but his real passion lay with computers. He got his first PC at 19 and “taught myself to code right away and started doing startups.” He worked as a senior software engineer at early smartphone company YadaYada first for two years before embarking on his entrepreneurial path. The first of these was related to coupons being distributed over text messages, but the idea failed to gain traction.
The young entrepreneur soon went on to have his first taste of success, however, as he pivoted to downloadable ringtones. His new company, called MatrixM, “went from like $0 to $1 million revenue in less than six months.”
“The biggest problem was primarily that the users who wanted ringtones were unbanked people — teenagers.”Though he got off to a strong start, the next decade did not provide a comfortable ride. Youssef best describes this turbulent part of his life on LinkedIn, where he writes his title as “Entrepreneur” at “11 failed startups and many lessons learned.” The fact that he did not give up during that time speaks volumes. Though his initial success could be attributed to mere luck, it surely helped him to believe in himself despite years of failure. Whether he was a competent entrepreneur after his first success or not, he surely had put in the hard yards to become one after the 11th failure.
In his work at MatrixM, Youssef discovered that peer-to-peer infrastructure, then still in its infancy, was the key to getting access to ringtones and a broad audience — users could upload ringtones as well as download them. Today, Youssef explained, peer-to-peer platforms like Uber and Airbnb have “become part of our daily lives.” The same will soon happen with peer-to-peer finance. “Humanity has been waiting for this one for a long time,” he said. While developed countries can benefit, Youssef said that the need in emerging economies, like throughout much of Africa, is much greater.
He described the issues people face around transacting money as “mind-bending — even if they have a bank account and get a bank card, they can only spend $100 a month maximum with your Visa card.” This means that sending money in and out of Africa can quickly become a nightmare, as merchants cannot easily buy goods from China, for example. “They have to go through like three or four hops, turn their money into USD on the black market, and find a way to get that into a bank account that can actually wire the money because their personal accounts cannot,” he explained in an exasperated tone.
Paxful
Some time later in 2015, he was told of a method to profit by selling gift cards for BTC. Youssef was suspicious but decided to try it out of desperation. “I thought it was a scam, but it worked, so we scaled it up,” he recalled as if still surprised. With their system working, Youssef and Schaback decided to build a platform for trading cryptocurrency for gift cards, seeing it as “the best way to onboard the unbanked” into the world of cryptocurrency. After 72 hours of coding, Paxful was live.
Youssef recalls a time when he took a customer service call from a “desperate lady” needing to purchase $2.50 worth of BTC in order to pay for an online classified ad. Down to her last $13 and without a bank account, she had no idea how to buy Bitcoin, as no services were geared toward people like her. With her children crying in the background, Youssef guided her to go to a nearby drugstore and buy a $10 Walmart gift card.
“‘Okay, I’ll walk you through the whole process of turning a Walmart gift card into Bitcoin, and then actually sending the Bitcoin to that address.’ It was two hours — it was rough.”The experience was formative, as it illustrated the real struggles of those without access to the traditional banking system who try to use modern internet-based services. “That’s why Paxful is on top — we are willing to do what others are not, we’re willing to go where others are not willing to go, like Nigeria,” Youssef explained, referring to the fact that small transactions carry little profit. He said that he feels a deep connection to Africa because of his roots. “This whole time, my dream was to help Africa,” he asserted.
Today, Paxful allows users to buy and sell cryptocurrency via hundreds of methods. It is profitable and boasts over 6 million users, supported by “almost 500 people in nine offices around the world.” Soon, he believes, the platform will go mainstream, especially in Nigeria — which is the company’s biggest market and Youssef’s part-time home. “They’re the ones who are going to pull the rest of Africa forward. Nigeria is the Lion of Africa,” Youssef said with pride, as if he were a Nigerian himself. Soon, Youssef believes, it will be the Silicon Valley of Africa.
Built with Bitcoin
The Built with Bitcoin Foundation, where Youssef serves as executive director, aims to build 100 schools around the world in support of local communities — an idea inspired by his experience after Hurricane Katrina in Louisiana in August 2005. Youssef saw the devastation on the news and decided that “I’m going down there myself.”
On the ground, he found various charities to be of little help. “Finally, I managed to find these five Dominican nuns in the French Quarter. They had a school, and they wanted me to help rebuild and reopen the school.” Youssef went around the city to scavenge building materials and supplies, sometimes putting himself in great danger. At one point, he befriended a trucker, and “Me and him actually ended up looting a Lowes [hardware store] to get supplies to the school.”
“During this time I had a lot of adventures — one where I was nearly killed by the police, who saw me wandering through the city thinking I’m a looter.”The opening of the school, Youssef believes, was key to helping the city reopen after the disaster, as the police and fire department “wouldn’t have come back if they couldn’t have put their children back to school.” Schools, he realized, are a pillar of community development and civilization. “That’s where I got the idea for Built with Bitcoin — a hundred schools in the next five years, and we’ve already built three of them,” he said. So far, the organization has completed three schools. In addition to schools, there is a focus on sustainable farming and the provision of wells in order to guarantee communities access to clean water.
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Last week we opened our newest school in Kenya, where local children now have easier access to an education, paving the way for a brighter future.
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— Built With Bitcoin Foundation (@builtwithbtc) June 29, 2021According to the website, 92% of funds go directly into projects. One of the recent school projects in Rwanda was done in collaboration with a charity called Zam Zam Water. While the building of schools and wells certainly nourishes communities to grow, the idea that the proliferation of cryptocurrencies can help form more robust local and internationally connected economies is a much newer one. “I consider myself a Bitcoin optimist,” Youssef said.
El Bitcoin
When El Salvador’s president, Nayib Bukele, recently announced that Bitcoin was an official currency for the nation, the international press was skeptical. Youssef was among the CEOs who flew to the country in the weeks following the announcement, no doubt in hopes of opening up a new major market for Paxful.
In his view, the new Bitcoin Law, which is seeing all citizens receive an airdrop of $30 in BTC, benefits the common people. Still, he noted that “The old aristocracy of El Salvador came out” to disparage him as a colonizer after he “took a photo-op at the airport with a bunch of police guards who are not working for me.”
Youssef is confident that this is just the beginning, as grassroots use of Bitcoin and other cryptocurrencies will “spread to Costa Rica, Guatemala, Panama, Honduras as well, and eventually Mexico and all Central America — we’re seeing that very clearly.”