Interview With Paxful: How It All Started, The Future Of Bitcoin And Their New Affiliate Program
Paxful, the bitcoin marketplace that made headlines earlier this year for powering Backpage and helping turn more than 50,000 people into new bitcoiners, is continuing its crusade, preparing to launch a new affiliate program that promises to hook up a whole lot of new bitcoin users.
Set to launch in Q1 2016, Paxful’s affiliate program will allow content creators to earn 2% in affiliate fees, or 1,000% more than existing programs, “just by putting a few lines of code on their site or app.”
“Right now we are calling it our ‘Affiliate Program’ but it is far more than that,” Ray Youssef, co-founder and CEO of Paxful, told BTCMANAGER. “It is more akin to [cost-per-action] programs or Google Adsense combined with a mini web app.”
Aimed at converting mainstream buyers, the program will take the form of a small iframe window fully optimized for mobile devices that can be easily embedded on a website.
The widget will provide buyers with the “easiest, most instant experience” for buying their first bitcoins, without having to leave the website they are in. Users will simply need to indicate how much bitcoin they want to buy, select one of the four payment options – this can be either by debit card, gift cards, cash deposit or PayPal – and select the best deal.
Affiliates on the other hand will have their share sent straight to their wallet.
According to Youssef, the new widget and affiliate program was a response to “tremendous demand,” notably from content creators, wallet creators and even escorts.
“We have had intense demand for this program … and we believe that it will be huge for the space much like what Adsense did for the web,” Youssef said.
BTCMANAGER had the chance to catch up with the company’s co-founders, Ray Youssef and Artur Schaback, to learn more about the story behind Paxful, the challenges they had to overcome and how they envision the future of Bitcoin.
On Bitcoin And How Paxful Got Started
Ray Youssef: After the 2008 banking bailout, all of us got a very clear picture of the way things really were. Bitcoin held the promise of giving power back to the little guy. As entrepreneurs, disruption is very attractive. Bitcoin is the most disruptive technology since the Internet itself with the potential to be orders of magnitude more disruptive with the right frameworks in place.
Paxful was born out of necessity. We first built a payment processor for retail bitcoin but without enough bitcoins in mainstream circulation there was no problem to solve. We set out to solve the core problem, to take bitcoin mainstream.
Many have said that the mainstream doesn’t want or need bitcoin but everyday we see more and more businesses turning to bitcoin. Backpage is a premier example. These customers essentially were refugees of the banking system and when Backpage lost Amex, then Visa, Mastercard and every other processors, only bitcoin was there for them and so was Paxful.
Artur Schaback: The challenge of getting a liquid vendor base is always the first and greatest challenge for any market but for us it came quite naturally as many vendors were frustrated at the lack of communication and feedback with the current situation and came to us when they saw how responsive we were to their needs.
Ray Youssef: Listening to our customers to make the system simple enough for them proved to be the biggest business challenge I have ever had as a tech entrepreneur. We encourage everyone in the bitcoin space to spend more time listening to their customers and less time on the wonders of cryptography.
Artur Schaback: We built Paxful to be the friendliest, easiest to use peer-to-peer marketplace for newbies, to get bitcoins fast without bank accounts.
On The Backpage Effect
Ray Youssef: The Backpage effect took us by surprise and it nearly brought us down. Over night we had a flood of new buyers, many of which could barely copy and paste, only had phones, had no bank accounts and had no idea what bitcoin was: they just knew they needed it. We answered nonstop for days, seeing the entire process through their eyes and hearing the desperation in their voices.
Artur and I took all their feedback and tailored Paxful to their needs in real time. It was a frenetic and desperate dash to a finish line that never came, but every time we heard people celebrate when they finally figured it out, it gave us the drive to continue on. These were ‘non technically normal every day folks’ who were desperate to feed their families; we simply could not let them down. We redid the entire system in real time as per their feedback. It was a month of intense support and development and we each got only a few hours of sleep a week but it was worth it.
On The Future Of Bitcoin
Artur Schaback: Bitcoin will become a pivotal player in the world economy much sooner than people expect but it will not happen in the way most bitcoin early adopters have envisioned.
As wonderful as a decentralized non-inflationary public ledger and currency is, normal people just want a way to pay for things that they need. They want to do it as quickly as possible with the shortest possible learning curve. Learning the finer points of centralized banking and its history is simply not realistic.
The biggest challenge bitcoin faces is its ease of use. Normal folks can type a credit card number into a form online, but for them to copy and paste a long cryptic-looking bitcoin address and a decimal number is a nightmare for non-technical people. Our goal is to make bitcoin as easy to use as a debit card.
Ray Youssef: Bitcoin’s biggest advantages are its irreversibility and the fact that it lives on your computer; these are also its biggest weaknesses, at least in the eyes of normal people. Not being able to recover from a mistake or losing your wallet data and thus all your funds is incredibly scary for people.
Ultimately, bitcoin’s greatest strength is its community. This includes all the vendors who sell bitcoin, all the people who educate about bitcoin and the startups making bitcoin easier to use and supporting customers. It is hard to overemphasize how much good customer support can really put a beautiful face on bitcoin and give bitcoin a huge edge over the banks. This kind of thinking is a huge phase shift for people in crypto space, but it must and will happen as bitcoin approaches the mainstream.
On Regulation And The BitLicense
Ray Youssef: Regulation has its place. Clearly, the Mt. Gox scandal and the various mining scams should have never happened if there was proper regulation. We do support regulation that is aimed at keeping out bad actors and holding companies to certain levels of civic responsibility, but we do not support regulation whose aim it is to kill innovation.
The BitLicense basically outlawed startup agility by requiring startups to get authorization for new features from the New York Department of Finance before launching. While we support many of their other points, we simply cannot abide something that would effectively outlaw innovation. That hurts all of us and it was what made us leave New York for Northern Europe. It was a great move as we have tripled the size of our team and are moving even faster. Bitcoin is forging a whole new financial landscape, and agility in innovation is our prime asset.
Editor’s Note: Comments have been edited for length and syntax.