Why It's Better Not to Buy Bitcoin on Paypal

Original title: "Why Do You Suggest You Don't Buy and Sell Bitcoin on PayPal?" "

Original source: block impression

PayPal not only supports buying and selling Bitcoin on the platform, but also recently plans to acquire cryptocurrency custodian BitGo , All this proves that PayPal is serious about laying out cryptocurrency.

This action caused the price of Bitcoin to break through the high point of 13,000 US dollars. The event is not as optimistic as expected, and it is recommended that you do not buy and sell Bitcoin on PayPal. Why is this so?

On October 21, 2020, PayPal announced that it will launch a A digital wallet for buying, selling and storing Bitcoin, Ethereum, Bitcoin Cash and Litecoin. This confirms the rumors in the first half of this year, and is also regarded by insiders as a very important milestone.

This may really be a milestone, after all, PayPal will affect millions of users who have never considered cryptocurrency before. While changing people's old ideas, it also makes users think that PayPal is the dominant authority in the cryptocurrency field.

In Q2 2020, more than $221 billion in transactions were made through Paypal, but it has a bad reputation: Paypal has been freezing "frequently" Known for user funds, censorship and payment methods that conflict with themselves. Does joining Bitcoin mean Paypal is really starting to shift? It's not that simple.

First, is Paypal’s action a good thing for Bitcoin?

here Previously, PayPal was a well-known "cryptocurrency opponent". In 2018, its former CEO Bill Harris called Bitcoin "the biggest scam ever."

The sudden turnaround is surprising now, especially as public companies like Microstrategy and Square start announcing their purchases of Bitcoin. We've been expecting mass adoption of Bitcoin, so should the Bitcoin community embrace the arrival of PayPal?

The fact that big names like PayPal are starting to support Bitcoin is not because they really want to encourage people to accept Bitcoin. PayPal's press release has mixed messages:

First, the service is fully managed, which means users don't own their own private keys;

Secondly, PayPal intends to "provide account holders with educational content to help them understand the cryptocurrency ecosystem."

Anyone who understands Bitcoin will not agree to hand over their private key, presumably in PayPal's future user education, it will also directly ignore "not you Your private key, not your bitcoins" basic rule.

If millions of new users buy Bitcoin through PayPal, there could be a very serious information gap that will jeopardize their experience and disrupt Cryptocurrency rules. In the user Q&A statement, PayPal directly pointed out: "The cryptocurrency purchased on PayPal belongs to you, but PayPal does not provide the private key."

Time and time again The experience of exchange theft tells us that no one should regard the funds held by a third party as their own, not your private key, not your currency.

For some people, PayPal's rules can avoid supervision, and funds are also guaranteed. New users may even find it more comfortable than dealing directly with exchanges. However, some functions of cryptocurrency are also restricted at the same time - PayPal users cannot transfer their cryptocurrency assets from their PayPal account to other accounts, nor can they transfer their own cryptocurrency to their PayPal account.

Second, PayPal wants to be positioned as a leader in cryptocurrency?

With the entry of PayPal, it will be closely watched by other companies, institutions and consumers. Although PayPal can boast that it is professional in the field of "digital payment", it can't change a history - in the past, PayPal always took tough measures against users who bought coins on the exchange, on the grounds that the policy prohibited "involving currency exchange or check cashing". business" transactions.

This clause is still in PayPal's usage rules, which also shows that PayPal intends to restrict users and prevent users from withdrawing assets to secure wallets with key control Among them, let them only use cryptocurrencies on the PayPal platform, and by the way, also achieve the effect of restraining peer competition.

There is only one thing to celebrate with Bitcoin Hodl about the fact that PayPal supports cryptocurrency payments: Facilitating price increases. Long term, however, if PayPal doesn't give users control over their keys, it won't be of much value to the Bitcoin community.

The greater risk is that PayPal's influence in the traditional electronic payment field will be interpreted as a professional in cryptocurrency technology. If PayPal makes wrong suggestions in the future , may directly mislead the public, causing the entire Bitcoin user base to be biased.

Welcome PayPal to join the idea of bitcoin payment, but absolutely Don't expect them to lead the field. If you can, I urge everyone not to exchange bitcoins on PayPal. There are many other places where you can buy cryptocurrencies and let you completely own the private key. Although PayPal has made concessions to Bitcoin, the Bitcoin community should pay more attention to user education and popularization at this time, so as to prevent new users from falling into the trap set by Bitcoin opponents.

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