Vexl: The Next Generation P2P Bitcoin Trading App

Company Name: Exchange

Founders: Lea Petrášová, Marek Palatinus and Pavol Rusnak

Date of establishment: June 2022

Headquarters location: Prague, Czech Republic

Amount of Bitcoin held in treasury: Most of the treasury is bitcoin

Number of employees: 5 full-time staff and 5 part-time staff/volunteers

Website: https://vexl.it/

Public or Private? Private

Lea Petrášová is a cypherpunk heart with over 10 years of experience in the world of software development.

This made her the perfect candidate to help create Vexl, an open-source application that allows users to conduct private peer-to-peer bitcoin transactions relatively easily.

With Vexl, Petrášová and the team at SatoshiLabs (known for creating the Trezor hardware wallets) have created what Petrášová calls a “social network” that connects bitcoin buyers and sellers through their phone contacts, as well as the contacts of their contacts. In addition, communication between users is private and Vexl does not charge for the service it provides.

Petrášová and the team at Vexl are on a mission to enable people to use Bitcoin as it was intended to be used – without KYC, privately and without third-party intermediaries involved in the process.

We spoke with Petrášová to get more details on Vexl’s mission.

Frank Corva: Please tell us about Vexl’s mission.

Lea Petrášová: We believe that without the freedom to trade, we have no other rights. Bitcoin offers us the best entry ticket into a financial system that is not inherently exploitative and oppressive.

However, to serve this purpose, it cannot be linked to someone’s identity. We offer our users the option to buy or sell bitcoin peer-to-peer without KYC, in a way that is not only private, but also accessible, user-friendly and secure.

chore: What were you doing before Vexl?

Petrášová: I was a project manager for a small venture fund that also functioned as a software house. In 2018, we launched a spin-off focused solely on web3 development, specifically in DeFi. While the projects were academically interesting, after I sold the company, I realized that I wanted to devote my time and energy exclusively to Bitcoin.

Chorus: How did the idea for Vexl come about and how did you get involved?

Petrášová: This idea had been brewing in the mind of Slush (co-founder of SatoshiLabs, Trezor, Vexl) for several years. As one of the industry’s OGs, he anticipated the regulations long before they took effect.

When he found out that I had just finished my previous job, he reached out and introduced what would later become Vexl, essentially giving me the opportunity to take over the executive leadership of the project. I didn’t hesitate for a second.

chore: Vexl seems to embrace much of the bitcoin ethos. It’s an app that allows peer-to-peer trading, doesn’t require much KYC, and is open-source. Why was it important to you to design it this way?

Petrášová: We are not just Bitcoiners; we are also cypherpunks and activists.

When we came up with Vexl, we were solving our own problem: how to buy or sell Bitcoin without KYC, outrageous fees, or significant security and safety risks.

We couldn’t design a product that we wouldn’t be willing to use ourselves. There was never any debate about the nature of the software – we knew from day one that it had to be open source, KYC-free and peer-to-peer.

However, I spent a lot of time researching and balancing the “trilemma” of usability, security, and privacy.

chore: What was it like working with Pavol Rusnák, a legend in the bitcoin/crypto wallet space?

Petrášová: Humiliating. He is the kind of thinker you can ask any question and he will respond with an original answer. The range of his knowledge and interests is profoundly impressive. However, he approaches people and projects with kindness, respect and, most importantly, a great sense of humor. He is truly inspiring.

Chorus: You are not going to monetize Vexl. Why?

Petrášová: We strongly believe in the importance of our mission and are committed to making it as accessible as possible.

chore: How will Vexl continue to exist if you don’t monetize it?

Petrášová: We rely directly on donations and grants. I have deep gratitude and mad respect for everyone who helped us make Vexl a success. But thanks to open source, if for whatever reason it failed, I want to believe that someone else would pick up where we left off and keep things moving forward.

chore: Vexl is essentially a messaging app, something that connects buyers and sellers to trade with each other, just like LocalBitcoins. Why did you create something like this just now?

Petrášová: Because I clearly saw the need. Think about it – Bitcoin is currently the sixth largest monetary asset, aspiring to become a global and universal store of value.

Governments, through various third parties and financial institutions, can create registries of bitcoin holders. These individuals could then be censored, prosecuted, taxed, and their property could be controlled, compromised, or even banned.

Knowing the identities of Bitcoin users weakens Bitcoin’s ability to function as a store of value independent of state power. That was the first part of our motivation.

The second part of our motivation was much more practical: every time I orangeed someone and didn’t want to send them to an exchange, I didn’t have a good alternative. My options were to either sell them my own bitcoin or do a long search to find someone else who could.

Don’t get me wrong, I’m a big fan of platforms like LocalBitcoins. But as someone who has never bought bitcoin with KYC or registered on an exchange, I know firsthand the limitations that come with options like this.

chore: How is Vexl different from other P2P apps like Hodl Hodl, Bisq and Peach Bitcoin?

Petrášová: Well, first of all, we’re a non-profit, so we operate in a completely different space. I don’t see other solutions as competing, but rather as complementary.

The real innovation that Vexl introduces is our unique reputation model. In our marketplace, you can only view anonymous offers from your contacts and their contacts. Until both parties decide to reveal their identity, you don’t know who the other person is, but you can always see how many mutual contacts you share and who those people are, and possibly ask them for a reference.

This allows you to better assess the individual risk of the counterparty, which is almost impossible when connecting two strangers on opposite sides of the world – not to mention it can be downright dangerous if you’re using a fiat bank transfer for settlement .

If you really think about it, we’ve managed to bring real reputation to an app. And this social aspect – human interactions and experience – cannot be replaced by any technology. That’s why there’s no escrow, no fees on Vexl, and you don’t need to already have bitcoins to join.

Finally, I’m particularly proud of our user experience. While creating Vexl, I kept asking myself, “Could my aunt use this without problems?” This mindset has shaped our UI and I think it’s much easier to use than anything else.

chore: Why doesn’t Vexl decentralize their backend?

Petrášová: We are a non-profit organization with very lean operations. In a team as small as ours, we have to think twice when choosing what to prioritize.

While backend decentralization is something we’ll be focusing on in the future, our backlog is currently full of more urgent app improvements.

What’s great is that Vexl is already politically decentralized. Anyone who doesn’t want to rely on my decisions can simply take the code and modify it as they see fit.

chore: Why does Vexl ask for phone numbers?

Petrášová: If you zoom out, you’ll see that Vexl is, after all, a social network. Anyone who has ever tried to build one from scratch will agree that it is an incredibly difficult task. So we took a different route: why not build on top of an existing network? But then came an even bigger question: which one?

We also wanted something that wouldn’t go away anytime soon and was widely adopted around the world.

The answer was clear to us: using phone numbers and contact lists. From there we just had to find a way to use them while still keeping them private and secure.

Chorus: Have you ever seen mass adoption of Vexl or do you think the average person will find it more convenient to go to a regulated exchange like Kraken?

Petrášová: I am sometimes asked what my biggest fear is as a CEO of a Bitcoin company, and my answer is always “ignorance”. People often don’t care about financial freedom until it’s too late.

That being said, nothing is better marketing for us than the current financial system becoming more and more unbearably unusable and trade becoming more and more permissive. From that perspective, it would be a beautiful world if tools like Vexl became obsolete.

But Vexl was invented and cannot be uninvented. Perhaps it will be used for peer-to-peer bitcoin transactions. Or it could be used in the gig economy or to pay for goods in bitcoin.

Since we introduced the categories to the market, we have seen the circular economy boom. I’m building Vexl for everyone who has the courage to claim their financial sovereignty – even if it only serves a small community of users.

Chorus: Where are you seeing the most adoption for the app so far? Why do you think people in these regions adopt it?

Petrášová: Most of our users are from the Czech Republic and Slovakia. I think the success has a lot to do with the history of these countries and their economic isolation during the communist era. There is a long tradition of people hedging against oppression with stronger currencies and participating in the gray economy. In addition, the support of SatoshiLabs certainly helped us a lot during the launch, especially in Slovakia and the Czech Republic, where SatoshiLabs is well-known and respected.

We are also seeing significant growth in Germany, Austria, Italy, Switzerland and the UK, mostly through meetings. In recent months, I am very pleased to see local Vexl initiatives also thriving in African countries.

Chorus: What’s next for Vexl?

Petrášová: Over the summer, we were able to successfully rewrite our backend, which was a major hurdle for future development. This opened up the opportunity for us to introduce a wide variety of improvements to the social network that we’ve had on our roadmap for a long time.

Another major goal is to provide education about the importance of Bitcoin non-KYC. It’s disturbingly common for users to not realize the real cost they pay for convenience or convenience when they give up their personal data to financial institutions.