The rumors were true. PayPal will eventually agree to buy, sell, and pay using Bitcoin and other cryptocurrencies. The service will initially be available to users in the United States. According to the announcement made last Wednesday, October 21st, this new element will be available on the popular payment platform in the “coming weeks”. Apparently this inclusion arises from the alliance between Paypal and Paxos.
The news was of course very well received on both sides. Bitcoin’s market cap has increased, and the PayPal company’s market capitalization has also increased. In fact, the two assets are close together. Apple ranks first on the list of most valuable companies, followed by giants like Microsoft and Amazon. Bitcoin would take a place below PayPal, which ranks 21st with a capitalization of around a quarter of a million dollars.
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It’s all a matter of trust. Beyond the details, this news has raised the spirits of all of us. Suddenly we’re all a little more optimistic about the future of Bitcoin today. And that is obviously reflected in the general mood. That of course means more buyers and fewer sellers. PayPal has always been portrayed as the bad guy for the crypto community. So this change of heart has great symbolic power. The story undoubtedly has its dramatic impact. The inclusion of Bitcoin in PayPal is more than a service, a triumph of legitimacy for Bitcoin. The next limit would be acceptance on Amazon or a similar measure by a big tech.
The introduction of Bitcoin in retail is considered extremely important by many. That is, Bitcoin as a payment platform. In other words, a libertarian PayPal. I have to admit that the thought never caught my attention. We have many options for buying a coffee. I never understood this obsession many bitcoiners have with the brown. Personally, I don’t mind doing my daily expenses with Fiat. Can I buy a coffee with gold? Can you buy a coffee with Apple, Amazon, or Microsoft stock? Perhaps. But it’s not very convenient or convenient. However, the lack of a ‘commercial takeover’ of these assets does not affect their profitability as an investment.
I have to admit that my PayPal account is required. I only use it when I have no other choice. Sometimes some purchases can only be made with PayPal. So sometimes there is no choice. If you want to buy something from a provider that only accepts PayPal, you need to have PayPal. I use PayPal occasionally, but I don’t like it. To buy a coffee, I usually prefer cash. For example, to buy something on Amazon, I find the debit card option very handy. For me it’s not just a great investment Bitcoin is particularly useful as a bridge when changing money. In short, every problem has its ideal solution. I don’t believe in universal solutions.
That said, it doesn’t reveal to me the problem of Bitcoin’s commercial launch. As an instrument, however Bitcoin is a great adventure. It’s fun and fun. PayPal, on the other hand, is a nightmare. It is a third world bureaucracy on the internet. I’ve always said that having a PayPal account is like living in a Kafka novel. Somebody must have slandered Josef K., because without doing anything wrong, one morning his money was blocked and he paid commissions until he could no longer. The place is very nice and friendly but the red flags, locks and commissions are too much for my liking.
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C.I hope beyond my personal preferences it needs to be acknowledged that PayPal is PayPal. It’s a giant with more than 305 million users (with an average balance of $ 70 and $ 40.5 million per year). More than 22 million merchants worldwide accept PayPal. They handle more than 100 currencies and are in more than 200 markets.
In other words, PayPal is a very important network. I don’t like it very much. But it is evident that many of its users think the service is wonderful. On several occasions I had to swallow my pride and take advantage of the service. That is the power of a well-established network.
Now PayPal is finally officially in the crypto world, following in the footsteps of its competitor Square. Square has had very good experiences with crypto and its success certainly inspired PayPal. Square (Cash App), Robinhood, Revolut, eToro and Raiz are already working with crypto. This means that PayPal is late for the race. However, we have to remember that PayPal is very big. Coinbase, for example, has 30 million users. Square’s cash app has 24 million. Etoro has 13 million. Robinhood, 13 million. And Revolut, 8 million. In other words, PayPal is in a different league with 305 million worldwide.
Of course it’s not Facebook, CME or ICE. It’s not just about the number of users. The most important thing is the money that goes into buying Bitcoin. That’s the detail. Based on the information available, PayPal appears to remain an essentially closed system. That is, BTC could be sent, but not easily withdrawn. They can be accessed on the platform and transactions can be carried out within the platform, but they cannot be sent to a Bitcoin address, for example.
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The problem with Bitcoin in PayPal is the regulatory implications (taxes, etc.). In other words, we would be in the eye of the hurricane. This is a very important detail as buying something with Bitcoin is not the same as buying something with Fiat from a legal perspective. Bitcoin is usually considered a property or commodity, not currency. Which complicates things. In some countries, the idea of commercial launch of Bitcoin is not very practical due to the tax issue. That said, buying your coffee or groceries with Bitcoin would be very expensive.
Of course, I welcome the passage from PayPal. That seems great. In my case, I could send Bitcoin to PayPal to pay for something that I can only pay with PayPal. That way, it would save me the hassle of going to Localbitcoins to do the exchange through the OTC market. However, it would be exceptional and I would limit myself to small transactions.
The mere fact that Bitcoin is represented in a network of more than 300 million people is in any case positive, as with this notoriety we could gain new followers who will eventually open BTC wallets elsewhere. The news is great. And the public rightly sees it as great. PayPal, welcome to the family!
The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.