I want to build an ecosystem around Bitcoin, but also we want—I think the most important ideology that we have is that Bitcoin is great, but there are things that the mission of Bitcoin is much bigger than the current state. So Bitcoin Equities to me is the way to bring Bitcoin philosophy into the traditional markets and equity markets. So for example, with Bitfinex Securities, we have two licenses, one in Kazakhstan and the other one in El Salvador, that allows us to help smaller companies that would struggle to access to raise capital. We will help them, we are helping them to raise capital, to build opportunities in the countries that are very much in favor of financial inclusion and they need financial inclusion like El Salvador.
All right, welcome back to another episode of Bitfinex Talks. I'm your host, Ricardo Martinez, and today we have a very special episode. We're celebrating Bitfinex's 12-year anniversary, and I'm here with Bitfinex CTO Paolo Ardoino. We're going to take a walk down memory lane and discuss some of the noteworthy things that Bitfinex has gone through in its 12-year journey. Paolo, how are you today? Thanks for coming on the show.
Thank you for having me, Ricardo. I'm great.
All right, so 12 years, Bitfinex has been around for over a decade. That's pretty much a noteworthy milestone. And my first question, I guess, to kick off the interview is, when did you first become a part of Bitfinex? Because as I understand, Bitfinex was around before you joined the team, correct?
Yes, Bitfinex started in 2012, I think about late 2012, and I joined November 2014. You know, it was one of the best decisions that they ever took in my life. It was one of the most exciting opportunities, so groundbreaking. At the time, 2014, Bitcoin was still either mocked or ignored by the establishment. You know, 10 years after that, it's different. Different state of the industry. But I felt like almost Christopher Columbus in 2014 when I joined Bitfinex.
Nice. And when you join, did you join as CTO or did you join like in another role?
No, look, I mean, I had my startup in London. I was building software for the traditional financial sector. I was working with banks, I was working with different pension funds. Must say, very, very boring, very annoying, frustrating because the technology in traditional finance is very, very old. It's like 30, 40 years old, kept together by rubber and bent. It's—when I looked at Bitcoin in 2013, it was like going to Mars. When you see one single open network that ensures trust, ensures integrity, and can also carry the perfect form of money, as a nerd, as a geek, but also as a kind of activist, I don't know, but as an ethical actor, it was super exciting. Then in 2014, when I had the opportunity to work at Bitfinex, I was tasked with a very specific job. I joined as a senior software engineer consultant to help Bitfinex scaling the matching engine. When I arrived at Bitfinex, the matching engine was very limited, let's say. It was very slow, would only cope with, I don't know, 10, 50 orders per second. And Bitfinex was getting popular, Bitcoin was getting popular, business was so. So 10, 50 orders per second was not enough. Just to give you an idea, 10 years after today, Bitfinex's matching engine can scale to millions of orders per second. That is the scale we can get to. We have hundreds of different pairs. In 2014, we had Bitcoin USD and Litecoin. So yeah, I was tasked with that to help the growth of the matching engine specifically. I didn't take care of the rest of the platform at that time.
These days, Bitfinex calls itself the original Bitcoin exchange. Reflect on the way Bitfinex was in the early days when you first joined. How do you think that Bitfinex reflects that vision after all these years?
I mean, look, when I go on the websites of some of our competitors, I feel a bit sad because it feels like the industry entered into a very wide gamification of the sector. In the sense that you go on some website and you see dogs on the homepage, dogs with hats, and cats and ducks, and every single animal. I don't think that is what—when you think about Bitcoin and the Bitcoin industry, you should make sure to never forget the history and why it was created in the first place. Bitcoin, why it was so important, and why it is still very important, and why we should carry on with the original mission. The original mission was not creating NFTs and pump and dumps and illusionary tokens. The mission was financial inclusion, unstoppable money, peer-to-peer cash. And that is something that, although Bitcoin is through and definitely we listed different other tokens, we are actually always—we have this internal force that is Bitcoin first. We invest in many Bitcoin projects. We were one of the first exchanges to support Lightning Network. We keep building Lightning Network, we fund RGB, that is tokens on Lightning Network, and so tokens of Bitcoin. We support Liquid. Bitcoin is our passion. And that's why we should call ourselves the original Bitcoin exchange, because while the world of crypto is changing, I think we are remaining our ethos, our morality remains the same as it was from 2012 and 2013.
Okay, that's a perfect segue into my next question. We know 12 years in any industry is a long time, but in crypto, it's even exponentially more. It could feel like a lifetime with how quickly the industry changes. And in any industry, you're going to have blood, sweat, tears, scars, memories. What would you say are like the biggest challenges that Bitfinex has faced over the last 12 years?
Well, for sure the biggest challenge was in 2016, right? So in 2016, I just—I had myself up, said in London, I decided to shut it down and to fully focus on Bitfinex. And then just one month after I did that, Bitfinex was hacked. It was second of August, 2016. And I think that moment was the biggest setback but also the biggest opportunity, the biggest show of commitment as well. I believe that in a very bad situation, that's the moment you can show your character. And that's what I loved about the Bitfinex team. We all together decided that we suffered a security breach and we had to work hard to give back to the community, to make everyone whole, which we did in just seven months after the hack. So that was the most difficult moment but also the most brilliant moment that defines our team, that defines our internal ethos as a company. So I like to think about the setback as an opportunity, as a trial by fire.
Okay, and what do you think it is about Bitfinex's company culture that kind of contributes to its success and resiliency? How would you describe that?
So it's very important to me to have focus and not be distracted with the flashy things all the time. I remember when from 2020 to 2022, you could see every single exchange having their names on all the stadiums, football clubs, all the possible things that could make it even more flashy. Bitfinex never did that. So we started thinking, okay, what is our differentiation? It is that we are the original Bitcoin exchange. We should focus on Bitcoin adoption, we should work with countries like El Salvador, we should bring people onto Bitcoin, to help them understand why Bitcoin is important. So sometimes you end up making less money, but anyway, Bitfinex is well profitable, so we're very happy with that. But yeah, sometimes you lose some opportunities, but those opportunities are just noise, rumor around yourself that will distract you from the very important mission that is financial inclusion.
Last year or two years before adopting Bitcoin, Bitfinex unveiled the Freedom Manifesto and Bitfinex's mission as a company is to deliver tools for financial freedom. What qualities do you look for when hiring new employees? What kind of qualities are you looking for in assembling a team that could kind of meet that goal?
We want people in our team that are humble, that can execute, that want to work at Bitfinex to help their own families and their own communities and local communities. We have people coming from 60, 70 different countries in between us or across our entire group. And each one of us has different family, personal stories. And we want to focus on people that are very talented, but that is not enough. We don't hire flashy TV personalities. We dig into the quality, of course, technical skills or general skills of the person. We want high talent, but also people that are able to deal with a high degree of morality. And that's what I like. Compared to our competition, our team size is 110, and we have this ethos as you well know. But a lion, usually, as Elon Musk demonstrated on Twitter, could cut 80% of workforce and still have things keep going. We don't want to get to the point where we grow so much and then we need to cut forces. We only hire the people that we need, that are highly motivated. That's how we can compete with the team.
In regards to Bitfinex's growth, what strategies or decisions do you think have been most critical in helping it scale and become so successful?
Yeah, we never took the easy decision. Again, we didn't open a platform, we didn't do many things. I think keeping your eye on the ball is one of the most important things in business. Of course, you have to look around, you need to understand what the competition is doing, but not keep being jealous of what the competition is doing, then you will never deliver your mission.
Okay, and you've touched on this several times already in the interview, but Bitfinex focuses primarily on Bitcoin as the foundation of a new and open financial system. How has that focus on Bitcoin evolved over the past 12 years?
Well, we started looking at different products that we could launch on Bitcoin or different technologies to integrate, like Lightning Network, RGB, Bitcoin derivatives. We work with Synapse to offer Lightning channels that can be one-click Lightning channels. So we integrate with them so you can buy gift cards with Bitcoin. So we want to build an ecosystem around Bitcoin, but also we want—I think the most important ideology that we have is that Bitcoin is great, but there are things that the mission of Bitcoin is much bigger than the current state. So Bitcoin Equities to me is the way to bring Bitcoin philosophy into the traditional markets and equity markets. So for example, with Bitfinex Securities, we have two licenses, one in Kazakhstan and the other one in El Salvador, that allows us to help smaller companies that would struggle to access to raise capital. We will help them, we are helping them to raise capital, to build opportunities in the countries that are very much in favor of financial inclusion and they need financial inclusion like El Salvador. So with Bitfinex Securities, now we help raising capital for micro capital that is a microlending opportunity focusing on Central Asia. We have different opportunities in El Salvador that are listed and we're working on. So this is bringing Bitcoin concepts into the broader financial world, and I think that we are just started. While everyone else is focusing on how to squeeze the last drop from crypto customers, I think we see a bigger being out there.
