# TOKEN2049 - P2PFinance and The True Use Cases of Bitcoin - Ray Youssef (Paxful)

- Channel: [TOKEN2049](https://streameth.org/token2049)
- Date: 2019-10-09
- Watch: https://streameth.org/watch/yt-4QGr2dCPEvM
- YouTube: https://www.youtube.com/watch?v=4QGr2dCPEvM

## Transcript

hello everyone pleasure Simon thank you for the awesome talk that outfit you're wearing is awesome you gotta tell me where you got that man the shoes as well so guys today we're gonna talk about the true cases of Bitcoin and cryptocurrency this is something that we've all been wondering about right whenever I meet friends who work in the press they always ask me what is Bitcoin good for is it good for anything yet and the maximalist to me wants to get up and say well you know it's accepted at when you stop and you think about it it really isn't good for that much right by itself it really can't do much there needs to be more around Bitcoin there needs to be a framework and the great thing is it's actually been under our noses the entire time right so let's get into it wait did this journey start this journey started the same place every technology starts in the gray markets right what was the first deal on the Internet I believe was a $25 marijuana trade right and two hand cash in person right it has started block right pretty dark with the dark web and Silk Road and then it gets greyer and greyer right Satoshi dice online casinos sport betting adult etc and then it starts to get a little lighter right you start having you know vaporizer shops accepting Bitcoin why because you can't accept Visa and MasterCard anymore biz it's not federally legal are they committing a crime absolutely not and this is the gray area and we're still in this gray air in a lot of ways even amazing projects like aetherium if you think about it the whole ICL thing really when you look at it 99% of it was a legitimate right it is a kind of gray area so a theory mister still trying to fight its way out of that gray area use case and they're not the only ones right and there's nothing wrong with that that's how everything starts you look at Tron and EOS most of their volume right now is in gaming applications particularly sports betting and gaming applications so they will also qualify as this gray area right but there's more as always so this is where we're at right now we are in the era of speculation I would estimate at least 90% of all cryptocurrency volume happens through speculation right so what is this what's happening on exchanges I think high frequency BOTS lots of manipulation various vectors of attack from stale order sniping spoofing the layering front running wash trading the works I believe Justin son is here I know I kind of got burned on BT T I'll admit I fell into the FOMO and a lot of people have right nothing wrong with that or is there right when you look at speculation and what it is I think we all kind of feel it in our bones right now this is not healthy and this is leading us to a very very bad place speculation no matter what in any form is always toxic and it's destroyed pretty much every single civilization severed slutted you think we'd have known better right we came from this movement that was born out of you know the Wall Street bailout right and what are we doing we're even more manipulative more underhanded and what's happening on Wall Street some of the shenanigans in crypto would horrify even the most corrupt Wall Street bankers I think Gordon Gekko would be rightfully impressed with what's going on right now so the question is is there anything else right these two use cases they absolutely are true use cases we know they work people use them this is responsible for most of the volume right now the biggest players in crypto are the exchanges they hold the most power they decide what goes we cannot deny that this is the status quo and we haven't learned too much honestly so 2017 things went up 2018 things went down it should have been a lot worse guys all I have to say considering how bad things work in sick and screaming the level of greed in the ico scene things should have been much much worse I'm actually very bullish right now because we're all still here we're still in this room we're about 33% of what we were out of the beat right the crowd is a little thin but it's okay we're still here and we're still standing so I'm very bullish on the future but let's call be thankful for the correction right so if we're gonna understand what the true use cases are let's first understand how we got here right this is everything that's happening now is basically the the product of three miracles right three miracles that have come together right so ten years ago what happened we birth of peer-to-peer electronic cash and that in itself is a miracle right we have a decentralized ledger permissionless where anyone can store their value and transact Satoshi Nakamoto Bitcoin white paper etc you guys all know the story so I think we can all agree that this is a miracle when I first read this white paper I thought it was nerd money I didn't really get it right but I started to really get it once I started meeting the people in crypto and this brings us to the second miracle and it really is this human layer you know this blockchain powers Bitcoin right that's a cryptocurrency layer elliptical curves one not just the ability to make a magical random number right but the human layer is far more important you think about what would over be without its drivers right every time I would meet the people in Bitcoin they would open up my mind so I became a libertarian because of Bitcoin and even more importantly I began to question what money actually was how many people here before Bitcoin could say what money actually is right I thought it was just pieces of paper and then Bitcoin began in a kind of deep dive down the rabbit hole for me right and I'm very thankful to Bitcoin for that because I think that's probably the best thing you could ever do could actually get us to question what is money what is this thing that is so pivotal in our lives that makes us fight with our girlfriends all the time right so this human layer is an amazing thing it is a miracle we think about it everyone in this room that's evangelized for Bitcoin educated and most importantly use Bitcoin in the day to day lives even if they're just to give someone you know five bucks worth of Bitcoin or showed them how to set up a wallet this is a miracle in and of itself there has never been a social movement as powerful as dynamic and as passionate as the Bitcoin movement at least in my lifetime of 42 years old I don't know that counts for anything right like this is a miracle guys and I'm pretty pretty proud to be a part of this miracle I really am and the third miracle is the sharing economy itself right so it all started in 1995 with Craigslist just the bulletin board right of stuff and it worked Vegas is still very popular and then what happened it got extended out Airbnb and uber ten years ago if I came up to you and said hey why don't you rent this bigger bedroom out to some stranger you never met from you know Honduras you'd be like come on you wouldn't do it right you wouldn't get into a stranger's car either to go somewhere right but because of the sharing economy our minds are open to these things right now we can share our hospitality we can share our transportation our vehicles our expertise and now finally we can actually share our financial instruments the tools that we have available that others might not and this brings us to peer-to-peer finance now this is the killer app of Bitcoin and cryptocurrency and it's been under our noses the entire time you think about humanity and what we've been doing it Maddie's been doing peer-to-peer finance for at least a thousand years right it has different names in different societies the Muslim called the hawala the Hindus call it hoondi right every culture has a name for this because it helps them break out of their economies it helps them move money around and all peer-to-peer finances is people helping other people with their money problems right we can't really understand this too clearly in the West because we don't have so many money problems we just don't have enough of it but we can use the money that we have but people's in Africa in Southeast Asia and Latin America they have money they have a lot more money than we think they do they just can't use it they can't move it around but they don't have access to the golden circle of financial services that we do here in the West right so some examples they're coming believe me there's tons of examples so everything that I'm talking to you about here today is not something that's coming from my mind I'm not some navel-gazing developer or building nebulous applications all this has been learned from talking to the people and the CEO of paxville but I do customer support almost every day now actually because I want to actually know what the people are doing I want to see what their problems are and they're very happy to talk to you they really are all we have to do is have the ability talk to them and when we talk to them we find out that what they would really love is a global financial passport right imagine if you had a passport I don't know from Liberia or Sudan or I how many countries could you get into right but you have an American passport a UK passport it's a lot more valuable right for a reason I think about this people need a financial passport we'll get into these examples but at the end of the day this is basically like uber for money we're giving people the ability to lend out their bank accounts lend out their PayPal accounts to make payments receive payments any financial network in the world is now accessible why because we give people magical friends in every country in the world like for example say need to pill bill pay bills in Europe and I do I've been living in Europe for the past few years married a European girl but because I'm an American and I have a Bank of America account I can't actually wire money from my Bank of America account in New York to Europe unless I'm physically in the branch in New York State this is the truth right now this is the absolute truth you think about it in that sense I'm kind of under Bank right so what do I do either I'd go fly over to New York to do the wire or I get on paxville or any other people often like packs lynnae's find a guy in Germany or whatever and I say hey I need you to pay my lawyer bill here's the invoice he pays it from his bank account straight to that guy's bank account I instantly say or at least same day I'm the SEPA Network and it's free because he's getting bitcoins from me at market rate I'm paying him back with bitcoins at market rate it's free and this doesn't just to me and Europe I've done this with my friend in Berlin right she's from Kenya I paid a bill or I she no I remitted money to her sister via mpesa using paxville right I just basically sold some Bitcoin to some guy in Kenya he had an MP a count I gave him his her sister's number he sent it I released the Bitcoin deal done completely free remittance in fact she actually made one percent on that so our sister got a little more that sure beats Western Union 20 percent fee two days wait ultra get accuse in the line right instance not just free but you're actually making money on it right so it's basically Wall Street for the people powered by the people right anyone can get on this network you can put up an offer you can say hey give me your $1,000 Amazon if card I'll give you back eight hundred bucks worth of Bitcoin right and people actually run businesses on this it's business through arbitrage and we'll talk about that later all it is is an OTC marketplace for currency exchanges it can be a big corporation it can be if someone in this room you can start with as little as five dollars I just came back from Ghana and Kenya and South Africa and it was an amazing scene in Ghana one guy I met he's actually a passable trader and he thanked me for putting his quote unquote unemployed ass to work and now he has five employees and he's trading gift cause impossible for tremendous margins it's pretty awesome so at the end of the day what this actually gives us is something that's absolutely revolutionary right it's a universal translator for money someone with cash without a bank account can buy a gift card put that code into paxville that will actually get Bitcoin in exchange for that code right they lose something on that and then we'll see how that Bitcoin they can turn into another gift card or a PayPal deposit in the UK or cash in Cambodia and this is happening right now paxil does over 60,000 trades every single day and the average amount is about $70 right and I suppose we cater to the on back we do more peer-to-peer trades and any other peer-to-peer network in the world so let's get into some let's get into the other news cases actually so look ray market speculation we already went over them right and now we have these other five I'm very proud of this cute little diagram I made here I love cubes right don't ask me to do a Rubik's Cube can't do it alright so Ray markets speculation and they're in the order of when they appear as we've seen right payments ecommerce remittance wealth preservation and social good and we'll talk about each one but basically every single market in the world will score differently on this map right if you go to Venezuela wealth preservation will be off the charts right 1.7 million percent inflation this year right these people need a way to protect their money right so return to wealth preservation in the United States not so much right no one's evaluate our currency we're devaluing everyone else's currency we'll talk more about that later so let's get into it any uh Cantonese in the room you guys know this symbol means anyone get it well there's a couple translations it means you're fired but actually the real meaning is Chow and that's profit arbitrage right you take something and you nothing and you turn into something you know I believe in in blow with Johnny Depp they called it magic ghosts right it's the same concept right you take nothing and you turn into something that's what arbitrage is that's what chow is and you feel an unpatched all the time there's limitless arbitrage opportunities if there's 300 payment methods going in and 300 payment methods going out that's 300 times 300 these are the amount of arbitrage opportunities that you have and bitcoin in this sense is just the central clearing layer a peer-to-peer permission is clearing layer for every form of value in the world no matter what network gets stored in whether it's a retail economy like a gift card whether it's cash in hand a bank account gold mining equipment goods services anything and this is why pox will only supports Bitcoin because we believe me and my co-founder and everyone in the company of the world needs one single Universal clearing layer and that everything else is a distraction can I get an amen there we go you two all right so this arbitrage opportunities and people discover them people build whole businesses on this there's people that write box on packs will make up to a quarter million dollars of profit every week right usually very high margin payment methods like gift cards right other payment methods like bank transfer Western Union have lower payment of margins up to one to five percent but you talk to people that are heavily into arbitrage here and tell them you can make a one percent profit they're like really their eyes light up represent us a lot but I show them hey I was getting hold food gift cards a 70% off they're like they just lose it right well that was actually that was made you can still get Starbucks gift cards for 70% off on packs cool pretty awesome I stopped drinking coffee though so payments as a use case this is a huge one if you talk to people in Africa you're come to understand that so many people in Africa are merchants right they make their money selling goods right and they don't buy those goods in Africa because there's not much manufacturing happening in Africa hell of a lot manufacturing happening here in Asia right especially in China so what they do is they'll actually buy the stuff from China and have it sent over now where is their problem the problem is they can't make the payments you have to understand the African banking system is broken it's it's nearly impossible to send money from one African country to the neighboring African country next door with your bank in fact even if you have if you're on the same network same mobile wallet right there's MTN is the South African operator they run mobile money a mobile money user in South Africa cannot send mobile money to a mobile money user in Ghana right they cannot that networks are not interoperable so think about sending money from Nigeria to China it's nearly impossible they have to go to three or four hops they have to buy USD on the black market then they have to convert it to another bank account here then they have to try to find a friend that can help them move it over to China so if you think about it they've been doing peer-to-peer finance for the longest time Africans will usually turn to their friends and family and say does anyone here have a bank account here or know someone that can make this payment for me here on they work off a trust Network right this is peer-to-peer finance has been happening literally for hundreds of years and there's a huge problem for this if you can actually solve one of these payment corridors think about just from Nigeria to China alone or South Africa to Nigeria or work Philippines to China wherever it might be this is absolutely a massive revenue stream one of these revenue streams alone could rapidly change the face of crypto overnight there's tremendous profit to be made in solving these problems right now absolutely tremendous so e-commerce is the next one right I'll give you guys an example right I met a really awesome girl in Africa our name was Bagheera and she sold clothes that she made herself and she sold it mostly to people to women outside of Africa right and I asked to see her shopping cart she didn't have when she just had a new saran shop right and I looked at it the clothes are awesome I got to say that's but where's your shopping cart how do you get paid right and she's like well I don't have a European or American bank account so I can't get a Visa or MasterCard merchant account so I can't accept Visa or MasterCard I'm like really so how are you getting money so well I have a friend he's you know he would grew up in the same town but he's living in New York now and I just give him give people his bank account so she has this magical friend in New York City and she's actually giving his bank account all the customers they're sending the money to him he is emailing her and some yeah I just got the money and then she'll send the clothes and then he finds a way to settle up with her after the fact from his African bank account to hers right so it's already period of pro finance it's happening it's been happening this is how people are solving these problems it's not just Africa if you're outside of America or Europe you really can't get a Visa or MasterCard mirch account think how many billions of dollars in goods and trades and commerce is being lost here the opportunity is actually massive when I tell them about peer-to-peer finance about Bitcoin you know they're like wow I can actually have a magical friend in every single country in the world right now that can access any financial network whether it's PayPal any bank in the world absolutely these magical friends are available to us and it can happen it's happening remittance so this is a huge one guys and when you know I'm right in the beginning everyone in Bitcoin was talking about remittance to Bitcoin is gonna slay Western Union romance is going to be the killer app etc etc and I bought into all of it and what happened nothing right total right down total anticlimax right what's going on is Bitcoin really a club absolutely it is but it's in a very different way than where you're used to right so when it comes to remittance western you'll pay ten to twenty percent right but you have to understand Western use provides an awesome service because they have those off ramps in every single country in the world that they can actually spit out cash to anyone right so we would have to recreate that first for this to happen and the reason remittance been the killer app for bitcoins because we're those off-ramps in every country in the world right if I need to send money to Cambodia right now I'm gonna sell some guy in Cambodia like you know can you just give some money so how am I gonna pay him for giving money to my friend and what kind of framework peer-to-peer finance right right now if you go onto paxville you'll find people that will take your Bitcoin in every single country in the world make a bank transfer deliver cash to your mother your son anywhere in the world right this is real right they are incentivized by profit because they know that once they have that Bitcoin they can take it they can flip it they can make a profit they can use it to help people in their countries access the outside financial system they can access those magical friends stop a friend next door pay a bill to import something to run his business right so they want that Bitcoin but in emerging economies Bitcoin is very very difficult to get a hold of right as their currency is not worth much so how do we get Bitcoin into those economies to feed those local uh peer-to-peer entrepreneurs that's the question we have to solve that right how do we do it we mobilize the diasporas of every single country in the world we go like little ganas a little bitty African country right I think it's 26 million people don't quote me on that three billion dollars remittance last year right so all the apps to do is tell people in Ghana hey guys you can actually just get some Bitcoin and you can sell it to someone in Ghana at market price and they will gladly send money to your mother via mobile money wallet bank transfer local cash whatever and everyone is happy why was that guy living and say that person in Ghana living in the UK just sent money back home to Ghana at 0% fee in fact they might actually make a profit of 1 or 2 percent those people in those countries are super happy to get Bitcoin at all especially for anything under 10 percent that's like a huge bargain for them right and they're super happy because they just got Bitcoin a market rate we're almost near so it's a win-win for everyone right if we mobilize the diasporas we can start feeding these economies with Bitcoin this is the the only way we're really gonna bring Bitcoin to the emerging world right we have to face facts and we have to get people into the economy you have to get a Bitcoin into these local economies for me it always breaks my heart when someone leaves the room like that don't do it again please I'm sensitive so remains in Hong Kong let's some examples were here local examples right so there's a lot of Filipinos and Indonesians I believe working here in Hong Kong and I think 98% of them are female right and they work doing you know various household duties right and they send money back home it's extremely competitive remittance market right nice some big numbers and here we see the breakdown of it right so 98.5 percent of them are women right so you want to talk about women in Bitcoin right how about we help these women here this can make the most impact absolutely imagining them being able to send 20% more back home removing the pain removing the drama removing the friction right but you have to teach them about Bitcoin are you gonna go up to some you know Filipino maid and teach her how to download all you've done it you've done it you we'll all right we'll talk but there's better ways right we can write streamlined applications on top of these peer-to-peer file of pre declare marketplaces that streamline everything that abstract away the trading process and even abstract away the Bitcoin that's how we're gonna get to the mainstream and I say that to you as a true believer in Bitcoin but the truth is if we're gonna get the mainstream in we have to abstract away the Bitcoin Bitcoin will succeed when it's invisible and it's the people in this room the human layer that's gonna build these applications and bring real humans into it because we're mature adults who build stuff that works and looks nice right if the wealth preservation is an absolutely massive use case and it's only gonna grow bigger and bigger the currency wars are eating the world alive right and we've seen the currency wars are breaking out everywhere right now Venezuela is the hot one right now right 1.7 million percent projected inflation I really do feel for what's happening to the people there right these are basically geopolitical games right when the dark state deep state whatever you want to call them they don't like you they attack your currency and they destroy it Zimbabwe was it with Venezuela is up next Argentina Nigeria Turkey they're all suffering from this Russia fought off a currency wars attack right but when this happens people start to research it's like what can I do right now that single mother in Venezuela right she's got two kids he just got paid she knows next week the money she got will be worth half as much literally half as much or even less right so she's gonna buy as many milk eggs and diapers as she can right but you can't put it all into milk eggs and diapers right she has to save a little bit away what is she gonna do with that she wants to put in something that's gonna hold its value and Bitcoin as volatile as it is will hold its value a hell of a lot better than the Bolivar right once you tell her that hey you can put money into this but you don't have to keep it there you can get the money out at any time it radically changes people's perceptions at that point Bitcoin is not about an investment but just means to exchange your value right put it in store it pull it out whenever you want it to pay your bills once you do that it becomes real in people's minds it's all about the off ramps and this curve this use case will only grow the currency wars as bad as they might seem right now we're only just getting started legitimate i ciose the few that they were are you know examples of wealth preservation as well I'm just putting it out there you know just to be fair social good so this is what I'm really proud of right and this is kind of like my baby here this is number seven on the list and this is something that we are doing right now so we just built our second school in Africa right it's actually a huge complex of a thousand or 1,100 children right all the way from babies up to ages 13 years of age it's five Wells irrigation water treatment storage to school buildings are three school buildings actually and solar panels uniforms books everything we're paying for the teachers salaries getting the kids have free health insurance we're gonna build a sports field in a clinic we want to build 100 schools throughout Africa and the emerging world and this was all done entirely with Bitcoin built with Bitcoin how did this happen the first two schools were in Rwanda right moving money into Rwanda through your bank is kind of difficult but because there's Paxil vendors in Rwanda the one Bitcoin desperately all we had to do is we came to them hey here's a quarter million bucks worth of Bitcoin give us a quarter million bucks worth of Rondon francs they were ecstatic we had a quarter million bucks of Rwandan francs we immediately put it to work building these schools the only negative was it wasn't tax deductible was there's no bank paper trail right it all happened with peer-to-peer finance but it worked was instant it was basically free and hassle-free so this can absolutely happen this is happening right now the next schools will probably be either Ghana South Africa Kenya Philippines there's a town in Colombia that gets about 50,000 Evans willing refugees a day so those are all those are all candidates but my vision for this is that eventually I would like for the perhaps the 100 school or maybe four or five schools renews 100 school to be a school for gifted children Professor Xavier style we can absolutely do it you know we can give these kids an education equal to the private education they would get in Europe and America and that's one of the that's probably the second that's definitely the second best investment we can make in any culture the first best is to teach the people there the young unemployed college students how to create wealth with peer-to-peer finance that by far and waves number one is when you do that they're gonna start building those schools themselves absolutely so Africa has been our focus for a while and people always ask me why I was born in Africa myself to African parents but there's also you know there's a business reason behind it as well besides the sentiment that Africa has the greatest population growth in the world in the next 20 years most of the population growth in the world will be come from will come from Africa and it's predominately young population right and this is key because money what is money money is work if you can work you can make money if you have a young population that's wealth that's the greatest natural resource of Africa or any country in the world are those young people and as I travel around Africa I just got back from South Africa you see an amazing community of young brilliant ambitious entrepreneurs that are ready to move and if we can just mobilize this small army and show them the power of peer-to-peer finance they'll absolutely be all over it and the good news is we've already done it Africa's biggest economy is Nigeria and that's actually our second biggest market only after the United States and it's absolutely saturated with paxil traders right now will build businesses and it's transformed lives and we're gonna spread it to the rest of Africa as well God willing this Peter generation I don't know if you guys have heard the term but base skater first of these young upwardly mobile Africans that are kind of pissed off of the old fat hippos you know the other aristocratic rich Africans that really don't give a damn about them why was they had their bank accounts in France and they don't want to endanger that and that's the thing when we go to Africa we talk to regulators they're open to Bitcoin and cryptocurrency they really are but they're not good 20 thing because they have their bank account in Paris right and they don't want to endanger that and that's where he comes all down to thank you guys it's been awesome so I would like to ask your help it's spreading this gospel like everyone's looking for this killer app right where is it where the true uses of Bitcoin and it's been under our noses the entire time literally under our noses the entire time it's actually been happening for the past several hundred years right and now finally we can give people this framework that lets some access this humongous network of magical friends to peer to peer financed I'll let you guys get to launch thank you so much [Applause]