Kathy Gibson is with Paxful in Rosebank – Much has been written about bitcoin, fueling a bad reputation for the cryptocurrency, but its true use cases are not always what people think.
Possibly the best-known use case has been the grey market, points out Ray Youssef, CEO and co-founder of Paxful. These include gaming and sports betting, adult content and more.
Speculation is also seen as a major market for bitcoin, characterised by rigged exchanges, manipulation and traps.
But this isn’t where the value of bitcoin lies, Youssef says. “Considering how bad this was, how much manipulation and scams we saw, bitcoin is actually doing quite well.”
Bitcoin started our as point to point cash. “It is actually quite miraculous,” Youssef says.
“But the second miracle is the human layer that has grown up around the bitcoin blockchain. These are people who want to see good things happen to good people.”
The bitcoin blockchain is superbly powerful he says. “But the bitcoin community is more powerful.”
The sharing economy is central to bitcoin, Youssef points out. “The sharing economy is booming. We are open to opening up our homes and cars; why would we not be open to paying a bill for someone?
“We can lend out, timeshare, out access to financial networks. People are now willing to consider this.”
This is Paxful’s mission, he says. “Peer to peer finance is the global financial passport for the unbanked, the underbanked and more. You are not limited to the small area where you were born, or to your own currency.”
The Paxful platform allows anyone to buy a gift card, convert it to bitcoin and transfer it to anyone anywhere in the world.
“It’s the Uber for money,” Youssef says. “And people can actually make a living from it.”
He explains that Paxful is a marketplace for exchangers. “It is a universal translator for money, and includes escrow so the recipient knows that it is there.”
The listing service, escrow and wallet make up the full Paxful solution.
“This opens up the world of finance to everyone,” Youssef says. “To people who don’t have this kind of access now, Paxful is an absolute game changer.”
Payments is a big opportunity for bitcoin. In Africa, few individuals have bank accounts, and these are limited in terms of how much they can spend online.
Peer to peer finance lets then buy on a variety of platforms and potentially get more than they paid.
E-commerce can also be enabled with bitcoin. Youssef explains that is merchants don’t have a credit company account, they cannot trade online.
The solution could be to accept bitcoin, then sell it on a P2P market for cash straight into their bank account.
Immigrant workers face a huge problem in trying to send remittances, with migrant workers often having to pay 10% to 20% to send money home.
A potential solution is sending bitcoin that the family back home can sell as local money to their bank account or as cash.
Key to making e-commerce and remittance work seamlessly is that bitcoin has to become invisible, Youssef points out.
The world is in the age of currency wars, but Youssef says bitcoin can assist with wealth preservation, helping to shield funds from currency fluctuations and hyper-inflation.
“The magical seventh use case is social good,” Youssef says. “We have built two schools in Rwanda so far, and are building a clinic and sports field now as well.”
The use cases for Africa may be hard to see, Youssef says. But he believes the continent is rife with opportunity.
“There is a massive community of young, educated people who are looking for a tool to help them generate wealth.”
Africa has a young population and will experience more than 50% of the world’s growth in the coming years. “WE can show young people that they are not trapped; they can start building something.”