PayPal Might Start Selling Bitcoin and We’re Hype

By Peter Chawaga

This week, anonymous sources reported that mega online payment facilitator PayPal is planning to offer cryptocurrency through its platform, as well as its mobile payments subsidiary Venmo. The report indicated that PayPal and Venmo could soon offer the buying and selling of cryptocurrency directly on their platforms, as well as a built-in wallet that allows users to keep their holdings there.

Though none of the sources were named on record and the particular cryptocurrencies that could be sold weren’t specified, the report — coupled with recent job openings for PayPal’s new Blockchain Research Group — had the Bitcoin community excited.

What’s The Big Deal?

“Nothing burgerers” could be excused for dismissing the report, which came from CoinDesk’s Ian Allison. In addition to its reliance on anonymous sources, it did not include a specific timeline or any concrete details.

Also, PayPal already integrates cryptocurrency to a small extent. In 2014, the platform announced a partnership with BitPay, Coinbase and GoCoin to allow merchants to accept bitcoin through its Payments Hub. In 2018, Coinbase began offering instant fiat withdrawals to PayPal.

But the potential for PayPal and Venmo to offer bitcoin directly to their users is enough to get many of us excited, even as spurious as that potential still is. PayPal has some 325 million users who leverage the service to instantly transfer money digitally around the world. Plus, thousands of online retailers use the service to sell their goods. So, further integration of bitcoin could put the world’s original cryptocurrency in front of its largest audience in history — an audience that is already leveraging digital payments.

Plus, these new users would hypothetically benefit from bitcoin right away. If PayPal offers BTC investment on its platform, it would let users convert their dormant fiat cash into the soundest form of money ever created. There would be a lot of red pills being taken.

And, as Cash App has demonstrated, there is a significant appetite for bitcoin on mainstream digital payment platforms. The company reported $306 million in bitcoin revenue in its Q1 2020 shareholder report.

PayPal Also Might Screw It Up

However, it’s likely that PayPal users who leverage bitcoin will not realize all of the benefits that the middleman-free, natively-digital cryptocurrency can provide.

By removing the gatekeepers of the traditional monetary system, Bitcoin allows users to transfer massive sums with relatively insignificant transaction fees. As Eric Wall, the CIO of cryptocurrency investment firm Arcane Assets, explained during the BitcoinHalving.com live stream in May, this is a massive differentiator for Bitcoin that has attracted many of its users to date.

“I think we had the largest transaction in Bitcoin history just a couple of days ago,” said Wall. “I think it was Bitfinex that had a transfer that was over $1 billion, for just a 70 cent transaction fee. And, I mean, I think that it’s those things … that we can transfer around ... [that have] led to hundreds of thousands, millions of people getting attracted to Bitcoin.”

In that sense, Bitcoin alone has the capacity to do what PayPal does, but even better.

But it’s likely that the platform will custody any bitcoin that it offers on behalf of its user and charge some kind of fee for transactions. Thus, PayPal would be acting as the kind of middleman that Bitcoin on its own eliminates.

Still, PayPal has the reach, functionality and ease-of-use that would propel Bitcoin by leaps and bounds. So you’ll have to excuse the community for imagining what this rumored integration could mean. We know that it is just a matter of time.

Bitcoin News Roundup
 

Brazil Suspends WhatsApp Payment Service

Brazil recently announced it is suspending WhatsApp’s payment service in the country in order to “preserve an adequate competitive environment, which ensures the functioning of an interoperable, fast, secure, transparent, open and inexpensive payment system.” This is yet another blow to WhatsApp’s parent company, Facebook, which is desperately trying to get itself into the banking/payments industry.

Part of why this ruling may have come about is also because Brazil’s central bank is working on rolling out its own digital payments platform, PIX, which is scheduled to launch this November. It would be ironic if Brazil suspended WhatsApp payments in an effort to sustain a competitive environment, just so that it could roll out its own central bank digital currency with a distinct competitive advantage.

The New York Times Doxxes Blogger

On Monday, the popular blog Slate Star Codex was shut down by its semi-pseudonymous creator, Scott Alexander, after a New York Times reporter told him that a forthcoming article would reveal his identity.

Alexander said that he asked that his identity remain private because his main job as a psychiatrist requires a certain amount of professional distance between himself and his patients. This request was denied by the Times writer and his editor because of the newspaper’s policy of citing figures in stories with their full identity.

For Bitcoiners, this situation highlights the growing issue of digital identity and privacy. In a digital world, it can be dangerous to have your personal information available at the fingertips of any internet user. Many people, particularly in the Bitcoin space, choose not to reveal their real-life identity online for that reason. This sort of ethical paradigm is new, and it demands further scrutiny from all participants in the media. Privacy is becoming one of the most scarce resources in the world.

OKCoin, BitMEX Operator Grant $150,000 To Core Developer Amiti Uttarwar

Late last week, cryptocurrency exchange OKCoin and HDR Global Trading Limited, which operates the cryptocurrency exchange BitMEX, announced a $150,000 grant for Core developer Amiti Uttarwar.

Uttarwar focuses on Bitcoin’s peer-to-peer layer, notably reducing the frequency that wallets attempt to rebroadcast transactions and, therefore, the frequency with which transaction information is revealed.

Read more about the donation here.