PayPal’s cryptocurrency integration is an embarrassing attempt to deceive non-crypto people.
PayPal’s Crypto Integration
There’s been a lot of talk about recent integration of cryptocurrencies to PayPal. While in terms of PR this is of course very positive publicity for Bitcoin, in terms of usage and developing blockchain infrastructure, it has zero no benefits.
For those who don’t know, PayPal will allow to buy, sell and store Bitcoin, Ethereum, Litecoin and Bitcoin Cash using their own system. What is often missed from this news, at least by large media publications, is that PayPal will not allow.
- No deposits or withdraws of cryptocurrency.
- No paying with cryptocurrency or sending cryptocurrency to other users.
- You will not have access to your private keys.
This is basically the same as you would buy gold using PayPal, and PayPal will store that gold in their own safe, without giving you access to your property. So the obvious question would be, why use PayPal for buying gold?
PayPal misleadingly promotes that you can use your cryptocurrency balance to pay merchants and send money to other users.
How it works?
- You put USD to your PayPal account (using standard deposit options).
- You buy Bitcoin with USD.
- You hold Bitcoin for some time.
- You sell Bitcoin for USD.
- You transfer USD to another PayPal user.
Steps 1&2 and 4&5 can be automated and combined into one, but we can all see that in this equation, there is absolutely no need or use for Bitcoin. It’s still FIAT money that moves; you just exchange it for Bitcoin and then back for no reason, other than PayPal getting more money from you in terms of fees.
Review of the integration
If you look at the above points, you will quickly realize that this is the worse possible integration of cryptocurrencies to an online wallet. So the question arises: Why would PayPal do this?
The answer is very simple. PayPal is not stupid; they didn’t do this by accident because they don’t know how cryptocurrencies work. They knew exactly what they were doing. The whole point of this integration was to:
- Receive positive PR for being an innovative, pioneering company that is actively using modern technology.
- Collect more money from users in the form of FIAT-crypto-FIAT exchange fees.
- Maintain the market leader position by forcing users to keep their cryptocurrency funds in PayPal.
Sadly for all us of, their tactic worked. Majority of the population is still unaware of how cryptocurrencies work on a base level; thus, they are easily deceivable by high authority company such as PayPal. It’s naive to think that a selfish company, such as PayPal would do anything good pro-bono for the blockchain community.
Knowledgeable crypto people will never use PayPal for buying cryptocurrencies, and I don’t recommend anyone else to do that either. You will end up spending a lot more in exchange fees and will not be able to manage your own coins.(Last Updated On: March 10, 2021)