The loss of financial privacy is happening in small steps – stricter know-your-customer policies, blocked bank transactions, the disappearance of privacy-oriented Bitcoin wallets from app stores. It is a slow but all the more dangerous process that takes place over years. But when programmers in Western countries are imprisoned for writing open source code, the alarm bells should really be ringing. In an interview with BTC-ECHO, Vexl CEO and co-founder Lea Petrášová explains how threatening the situation is and why a strong BTC community is needed now. Also: How you can buy Bitcoin anonymously with Vexl and meet new people at the same time.
BTC-ECHO: Lea, what is Vexl and why is peer-to-peer even necessary?
Lea Petrasova: Vexl is an appwhich allows you to buy or sell Bitcoin as it was originally intended. And by that I mean intended by Satoshi Nakamoto, not by me. In the very first sentence of the Bitcoin whitepapers It is written that Bitcoin is intended to be a peer-to-peer version of electronic money and allows you to conduct transactions without a third party.
A few years ago, however, we realized that it was becoming increasingly difficult to trade Bitcoin in this way. While there were already some P2P projects, they were not without a number of disadvantages. The most serious was usually the problematic reputation. What I mean is that a trader can have 5,000 good reviews, but still scam you at number 5,001. Also, someone could have a criminal background. We tried to solve this problem with Vexl.
What makes Vexl different compared to older solutions like LocalBitcoins?
First of all, really everything in our app is peer-to-peer, so we don’t interfere in the transactions. As a trustee, we basically find a counterparty, and we do it in a very private way. We really encrypt every booking on our marketplace for every single participant. Even the offers and chats in the app are encrypted, so not even we know what’s happening on the marketplace, who is trading, if they are trading, and what they are trading. This is something completely new.
If we think about recent events, such as the arrest of the Samourai Wallet founders, would you say that privacy is under more and more pressure, even in Western countries?
Yes, and that really worries me, which is why I co-organized the Cypherpunk meetup here in Prague earlier this week. I also believe in the power of software, which is why we make everything open source. Even if all the people behind these projects are put in jail, there will be another open source software and new people will be there to continue the work.
What worries me even more is that people might just stop caring about privacy. That they only wake up when it’s too late. That’s why we wanted to make it cool and easy to protect your data with Vexl. When we started developing it, we always focused on usability and user experience. With everything we designed, I asked myself: could my aunt use this without me helping her – is it really easy enough?
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When buying Bitcoin through Vexl, how do I know that security is guaranteed and that the other party will not rob me?
That is precisely the innovation that sets us apart: the reputation model. We are not a peer-to-peer service, but rather a social network. It is like Tinder for Bitcoiners. So we have no contact with the Bitcoin being traded, we simply connect people with each other. On the marketplace in our app, you only ever see the offers from your own social network, i.e. from your contacts and the contacts of your contacts.
In practice, you are shown an anonymous offer, but you also see which friends you have in common with the person. This motivates people to behave properly. Personal reputation is at stake because you are meeting a real person who might know your friends or relatives. People are therefore really encouraged to act properly.
Here in Prague it seems to be quite easy to find people who want to buy Bitcoin for fiat, but the other way around is more difficult. How could one increase liquidity and bring more BTC sellers to Vexl?
Even in my personal app, the ratio between buying and selling is usually about one to two, and more people want to buy Bitcoin than sell. But because my Vexl network is already very large, I could easily get Bitcoin at the end of the same day. What helps is the community, the local Bitcoin meetups, because Vexl works through word of mouth. We are not a profit-making company and therefore have no money for marketing.
Ultimately, it’s about Vexl users convincing new people to use the app so that more trading takes place. Many people have someone in their social circle who still has Bitcoin from 2016 and would like to sell. Others already earn money in Bitcoin and need cash for everyday life. You really have to be active on Vexl and post an offer yourself. It also helps to expand your social network. If you meet three new people at a meetup, for example, you then have direct access to the contacts of these new contacts on Vexl.
When you think about our world in 2040 – what role will Bitcoin play at that time?
I can imagine an optimistic and a pessimistic scenario. In the latter, Bitcoin 2040 will be a parallel financial system for a very small number of people who want to trade and live freely. So there is a functioning network, but the majority of people will not care because they will trust their government, which will tell them that they don’t need Bitcoin at all. And if they still want BTC, then they would rather not get it directly, but through a Bitcoin ETF.
The optimistic scenario is that Lightning, or any other payment solution built on top of it, will be so normalized that it will be much more convenient and faster than current options. And then when we look back on this interview, we won’t understand how we ever used a financial system that was so broken.
Thank you for the interview.
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