14 min read
You’re reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
While the global debate on the long-term appeal (and impact) of cryptocurrencies and blockchain doesn’t seem like it will reach a conclusive end any time soon, Alex Alexandrov and Farkhad Shagulyamov are, however, quite clear on which side of the discussion they are on. “Crypto and blockchain are here to stay,” Alexandrov declares. “It is going to be embedded seamlessly into your digital and physical life, and the sooner you take the time to learn more about it today, the more you will benefit in the future.”
Now, their position on this topic shouldn’t come as much of a surprise- they are, after all, entrepreneurs who are essentially betting (and, well, capitalizing) on this realm. Besides the two being the co-founders of Velas (“an ecosystem of decentralized products that allow anyone to feel the benefits of blockchain technology”), Alexandrov is also the CEO of CoinPayments, which has been billed as “the largest altcoin payment processor and wallet solution in the world.” As such, there shouldn’t be any raised eyebrows when Alexandrov takes on an evangelical aura to explain why all of us -and yes, he means everyone- need to be clued into these digital inventions that are already making their presence felt in the world around us. “If you are an entrepreneur, you must do it,” he says. “If you are a business owner, you must do it too. Sooner or later, people won’t be able to avoid it. Everything that connects us globally will be heavily reliant on the blockchain. There is already talk about biometric passports running on the blockchain specifically due to the COVID-19 pandemic; it’s just another example of how the tech is being used other than through payment systems.”
Alexandrov is clearly someone who’s keeping himself abreast of trends that are moving the world in a different direction than we are accustomed to, and that’s a characteristic that can be chalked down to the entrepreneurial mindset he seems to have been born with. “I have always been an entrepreneur at heart, ever since I was a child,” Alexandrov says. “When I was five or six years old, I would resell newspapers in Odessa, Ukraine by waking up before everyone, and buying newspapers from the market while others slept. I then sold them to the adults on the way to work, before I took myself to school. However, at the time, being a Soviet era family, my parents didn’t appreciate what I did and told me to stop- I still don’t know why!” But that didn’t (thankfully) end Alexandrov’s entrepreneurial streak- on the contrary, he leaned in harder to this aspect of his personality. Fast forward a few years into the 90s, Alexandrov started making money off the sale and delivery of goods his peers wanted during that time- and that became the capital for another new venture.
Farkhad Shagulyamov and Alex Alexandrov, co-founders, Velas
“I took the money I had earned, and I started organizing street parties,” Alexandrov recalls. “These then became so popular that the police came to shut them down, thinking that adults were up to no good. Once they realized it was the work of a 12-year-old, they encouraged me to keep going, which I did until I moved to Canada.” But even migrating to a new nation didn’t dampen his entrepreneurial spirit- in his new location, Alexandrov found himself able to assemble computers, and then find buyers for them online. And while he did manage to make money off this operation, Alexandrov found himself wanting to earn more, and that led him to launching a business in an entirely new industry to do just that. “I found I could trade my time for money, and that got me interested in trading options and leverage, futures and forex,” he remembers.
“After the 2012 market crash, I came across bitcoin, and quickly began mining it at US$4 per token.” If you’re a bitcoin enthusiast, this is the point where you’d probably sit up and look at Alexandrov in a different light- his last statement makes it clear that he’s an early adopter when it comes to jumping on the cryptocurrency wave, and that’s also a testament to his eye for spotting opportunities that others may not be as receptive to.
“When I found bitcoin, I was already reading a lot of economic and banking books, so the concept of money was already quite clear to me (more so than your average person), and the concept of digitizing things was not foreign to me,” Alexandrov says. “So, when I saw bitcoin, I immediately recognized it as the future, and I never had any doubts about it. When I bought and mined my first bitcoin at $4, I told all my friends that this is going to reach a million dollars per coin by 2030. As an entrepreneur, to find an industry that you can be at the bleeding edge of is what we all strive to find. I was too young to capitalize on the dotcom boom, but I realized that bitcoin was my chance, and my opportunity.”
It was when Alexandrov started to sell off his bitcoin mining equipment that he realized the appearance of new entrants on the cryptocurrency landscape- these are what are today called altcoin, which essentially refers to any cryptocurrency other than bitcoin. “This was around the time when litecoin first came onto the scene, and we wanted to accept it in addition to bitcoin,” Alexandrov recalls. “So, we discovered a business called CoinPayments that could facilitate this. We were the 47th merchant on the platform, and after using the service, and liking it, I ended up buying it, and moving it to Canada.”
Once again, Alexandrov was ahead of the curve here- he saw the potential in altcoin at a time when there wasn’t a lot of interest in it at all. “We entered the sector in 2013 with the pursuit and goal of becoming the dominant payment processor across the planet, and to make life easier for everyone to store, send, and receive payments in digital currencies that we envisioned were the future,” he says. “Since we couldn’t foresee the future direction of crypto, we gave every coin an equal chance, and if they had the volume, we listed them, and started using them for payments and wallets for all of our customers to be able to pay with them.”
Source: Entrepreneur ME
CoinPayments may have started out small, but the company has since grown to become a global payment processor for cryptocurrency and wallet solutions. With Alexandrov acting as the CEO of the enterprise, CoinPayments has grown tenfold per year since 2016, with the enterprise stating it currently processes over $2 billion a month in total volume. With more than three million users in total (of which one million are active users), the platform currently accepts 2,095 different kinds of cryptocurrencies, with its offerings used by more than 70,000 merchants in over 200 countries around the world. But for all the success the platform is seeing today, it’s good for the entrepreneurs reading this to remember how Alexandrov got started on this enterprise in the first place.
“My main motivation to start CoinPayments was that I wanted to do something in the sector, and when I found a problem that I wanted to find a solution for, that was what sparked that burning interest for me,” he says. “I think this is very common for most entrepreneurs- for me, the trigger was being able to accept an altcoin for my business. CoinPayments was the solution to my problem, and we have grown from that initial spark. We didn’t make much money for the first few years, and it was a lot of work (as it always is) to get to where we are now, but it was worth it.”
Much like Alexandrov, Shagulyamov has had quite an entrepreneurial bent of mind as well. Shagulyamov started his career by building a payment and technology company in China, of which he was Chairman for three years. In 2016, he became acquainted with cryptocurrency, and he soon made his first investments into the space. Shortly after, he decided to make this into a business, where he and his partners in the wealth management sector in Zurich, Switzerland, created the first crypto international security identification number (ISIN). Later that same year, Shagulyamov set up a regulated crypto brokerage firm in the country (which is still active today), and he then went on to organize a large-scale crypto event during the World Economic Forum in Davos in 2017, which brought leaders in the industry together with global leaders and economic powerhouses. This gathering happened through the first major bull run for the sector, and this event took the entire crypto realm to a newfound global platform.
Shagulyamov and Alexandrov met on a mega yacht in Monaco, where leaders of the crypto industry were invited to network. The like-minded entrepreneurs clicked from the get go, and shortly after, they teamed up to build the Velas ecosystem. “Velas was founded in 2019 in Zug, Switzerland,” Alexandrov says. “It’s a project designed from the beginning to be an ecosystem in which other solutions can be built at scale. When you compare it to other blockchains in 2019, there weren’t many that could handle as many transactions per second, or handle a high load of smart contract initiatives.”
Alexandrov explains that Velas came into being after he and his team identified a need in the industry for a fast, scalable blockchain on which many services can be built on top of, while also integrating cross-chain, which refers to the interoperability between two relatively independent blockchains. Velas has thus been built on the idea of decentralized finance (or DeFi, as it’s more popularly known), with Alexandrov saying that its open-sourced blockchain ecosystem of products and services is an enabler for any kind of tokenization project. “We also have built something called a ‘container system,’ which allows for the cross-chain deposit and withdrawal of funds from other blockchains,” he adds. “There are other projects working on this, but we differentiate ourselves based on our speed and low transaction costs. Fastest, cheapest, bestin- class: it’s how we do things at Velas.”
It’s worth noting here that Velas is an acronym for “virtual expanding learning autonomous system”- that in itself showcases the sheer range of applications that Alexandrov hopes his enterprise will be able to contribute to. Indeed, one of Velas’ recent offerings falls in the realm of social media, with its aim being to build a more functional version of the popular Telegram platform. “One of the things we have been developing that I’m really excited about is BitOrbit, a decentralized social media platform,” Alexandrov reveals.
“It’s a platform that allows users to integrate Telegram group chats on top of native receive and send payment functions. For example, if you are an influencer, you can take photographs and make them free for everyone, but make other content only accessible to paying or subscribed followers, all on the blockchain. If you are a musician, you can upload some songs or content for free, or through a preview feature, but charge for full versions of the tracks. We also have a nonfungible token (NFT) market built into the platform. All of this is decentralized, and we take zero fees from the platform, because we’re taking a long-term view: if we can bring value today, then in the future, global, full-scale adoption will naturally ramp up.”
Perhaps one of BitOrbit’s most appealing features is the very fact that it is a decentralized platform- something that Alexandrov believes will garner attention from the global internet community. “We are really excited to build a social media platform that will be censorship- resistant and democratic,” he says. “This past year has exposed how vulnerable our lives are, so we know this is a really timely, necessary product and service for people to have at their fingertips.” Much like his mentality around CoinPayments, Alexandrov describes Velas’ BitOrbit as a platform that he’d actually want to use himself, and that is an indication to the tenets that drive him as an entrepreneur today.
“BitOrbit is a social media platform that I would want to personally use,” he says. “I’m not a big fan of any existing social media platforms, so we are building something we can be proud of. The motivation is never the money for me. I could have been sitting on the beach long ago, but I love the opportunity to build and meet new people every day. Business occupies all of your mental capacity, and there is nothing more exhilarating than being active with my own business, or being involved with other businesses at a high level.”
Alexandrov is now planning to continue his entrepreneurial pursuits based out of the Middle East- he’s now a resident of Dubai, which he says is going to be his (and Velas’) home for the foreseeable future. “The Middle East is a very forwardthinking part of the world that wants to be the definitive global financial and technological hub,” Alexandrov declares. “Dubai and Abu Dhabi want entrepreneurs to view this part of the world as the new Silicon Valley, and they have provided the legal and financial basis to make this possible. It is literally the single best place for any entrepreneur to be, even those outside of the crypto sector.”
But that’s not to say entrepreneurship here is all roses either- and that’s the premise for Alexandrov’s advice for entrepreneurs in the region (and beyond). “Don’t be afraid of failure, and remember that success is a habit- so, balance those two,” he says. “That is where the magic happens. If you can manage your failures, but understand that you have to succeed and continue, then this will be the difference between your business making money and you being successful, or failing.” According to Alexandrov, entrepreneurship is rarely, if ever, as glamorous as it is often portrayed in mass media, and understanding that is critical for one to feel fulfilled after taking on this career path for themselves. “It is never like you see on the news, or in the movies,” he says. “Very few people are overnight successes. Warren Buffet said it well: ‘You can make money, or you can gain experience, but sooner or later, one will be traded for the other.’ In entrepreneurship, there is nobody else to blame; you have to accept all your failures as your own, but you keep learning and keep going, always remembering what your goal is- never settle.”
Shagulyamov adds, “The key to success is building a strong and reliable team, as well as never ending hard work. A lot of people come to us only after seeing the results that are now evident, and they think it’s an overnight success. ‘There is no such thing,’ I tell them- every successful business has had at least a few years of hard work and sleepless nights behind it!” For now, however, their bets on blockchain are working out for these two entrepreneurs; but “the best is yet to come!” Shagulyamov exclaims. “Velas is going to be a major part of the future of blockchain, and we are here to stay.”