PayPal made headlines in 2020 over its opening its door to bitcoin allowing customers to make purchases with 4 cryptocurrencies including bitcoin.
Such acceptance from a payment giant surely bids well for bitcoin and crypto in general. But when we look into PayPal‘s cryptocurrency framework its offers to its users the picture is quite different.
Key points to note:
* No private keys are held by the user
* Bitcoin cannot be moved to/from PayPal
* Outside wallets cannot be used to make bitcoin payments
* Merchants DO not receive any bitcoin, they receive fiat
When making a purchase the process is fairly standard, users are given a price along with the fee [PayPal markup fee, not tx fee]. Purchases are instantaneous. Outside bitcoin cannot be loaded into PayPal, neither can the bitcoin be withdrawn.
Now, while making a purchase, the bitcoin is not actually getting transferred to the merchant, instead, the bitcoin is sold for fiat, and then the payment is made.
In the entire process, no blockchain transaction took place. Only buy/sell of bitcoin for fiat.
So in essence PayPal crypto pretty much acts like a PayPal coin, which can only be used on PayPal and nowhere else. Users have really no control over their crypto.
While on one side people are happy that a company as big as PayPal started accepting crypto but is this really the way? The entire value of bitcoin and cryptocurrency is non-existent when using PayPal. And surprisingly, no one seems to be talking about this…
Source: [The Truth About PayPal’s Bitcoin “Adoption”](https://blog.blockonomics.co/the-truth-about-paypals-bitcoin-adoption-b2d4b319b51d)
View Reddit by primalfabric – View Source