PayPal launches crypto checkout service
reuters.com
reuters.com
Highly disappointed that Square (Cash) has not launched a BitPay competitor and still only supports Bitcoin. They’ve allowed BTC deposits and withdrawals for years (with great UX!) yet are lagging far behind in release cadence.
The biggest barrier to spending crypto is still finding merchants that accept it, even through third parties. PayPal’s huge merchant userbase will allow dominance if/when they flip the switch to an open loop, “deposit your crypto” approach.
Only PayPal and Stripe can flip that switch at scale with a hosted checkout experience. Merchants don’t care how a user paid, they want fiat.
No one wants to be the guy who sells bitcoin on a massive scale.
Bitcoin sell liquidity is currently $162MM USD on Bitfinex at 0.5% slippage. Buy liquidity is $543MM USD (at 0.5% slippage). For comparison, the sell liquidity on Coinbase Pro at the same slippage is only $4.5MM USD.
My site https://cryptomarketdepth.com/ tracks the liquidity of various cryptocurrencies over time (for the exchanges: Binance, Bitfinex, Bitstamp, Bittrex, Coinbase Pro).
AH crypto don't ever change or do you're a fucking waste.
1. You send BTC to PayPal 2. PayPal sends equivalent dollars to the merchant.
But what is "equivalent"? What is the price of BTC at any given moment? It fluctuates a lot and you can't "lock-in" a price without waiting minutes (as opposed to milliseconds in other financial systems). So between the time that you sent dollars to the merchant and when you sold the coins you are exposed to risk of holding BTC.
Lightning does not help with this.
> It's like using a personal check - until the bank clears it you're at risk.
Which is 100% not true, it's not like a personal check. You are only at risk if:
* your counterparty decides to try and cheat you (despite knowing they will lose even more money if they attempt to screw you and you notice, so some game theory is involved)
* you are not watching onchain for a period longer than the monitor period (typically several days)
* you have not elected to have someone else monitor on your behalf (in exchange for a small cut of the "profits" if your counterparty tries to cheat you)
My point being - it's nowhere near the same as a personal check.
* Bad actors exist and will do this with checks or lightning, game theory applies to both
* It doesn't matter if you're watching the chain, you've already transacted with the buyer
* 3P Escrow is not unique to Lightning and is sometimes used with checks too
It does, but with lightning, as long as you are watching the chain periodically, you are guaranteed to not lose money. The same cannot be said for checks.
> It doesn't matter if you're watching the chain, you've already transacted with the buyer
It does matter if you watch the chain - this is how you determine if your counterparty is trying to close out the channel with an out of date state (at which point you can submit an onchain transaction that corrects the problem + collects a penalty from your counterparty).
> 3P Escrow is not unique to Lightning and is sometimes used with checks too
Watchtowers are not anything like escrow. It's simply allowing a third party to submit penalty transaction iff your counterparty attempts to submit an out of date state. They do not take custody of your funds.
You can make a lightning transaction, drain your bitcoin wallet before it verifies, and no amount of watching the chain will get the seller back whatever they traded you for that transaction. Just because you identify the fraudulent transaction before it finally verifies doesn't mean that the fraud wasn't committed. Same with bad checks.
I thought you were talking about 3P escrow, because watchtowers are even worse than escrow in fighting fraud, for reasons outlined above.
No you cannot, again, that's not how it works. You commit funds to a channel on chain before you can spend funds in a channel. I don't think you understand how lightning works.
Lightning is even dumber than I thought - and I already thought it was DOA.
You can click on a point in the time series graph to see this.
I mean lets say you trade USD/USDT on Bitfinex.
How do you get USD (not USDT) out of Bitfinex?
2. An Express bank wire withdrawal is sent out from Bitfinex within 1 business day and incurs a 1% processing fee.
The fiat on-ramp is probably a pretty big blocker for many new adopters. If paypal fixes that, it could have a large effect.
Other websites already support this. They just charge a 1% fee and call it a day.
Average credit card fees are already much larger than any fee that would be required to cover price changes.
They would never get away with this as a publicly traded company.
Tesla, a publicly traded company, got away with buying $1.5 billion in Bitcoin just fine.
PayPal can also sell that Bitcoin to customers who want to buy Bitcoin.
I'm replying to a comment saying they should use their cash reserve to buy bitcoin instead of dividends/buybacks.
And yes, they can sell it and have some level of "float" to support crypto buy/sell exchange. But the comment was a hodl comment to "make them more money."
Unproductive investments are basically the constant increase in stock and housing prices over the last decade. You're not buying those to make more money, there simply is no other place for the money to go. The only way the savings rate can be reduced domestically is through unemployment or underemployment. Unemployed people don't earn money but they still have to spend, which reduces savings.
It's a truly hopeless situation for the humans living the USA. But hey, at least the dollar is still "good".
Oh right, presidents are taking on debt to cancel the savings glut that was forced upon them. That's a bad thing.
I am a huge fan of BTC and have held some for many years. But it seems to me the reason this hasn't really happened yet is just that it's not really a big problem that needs solving. Why do people need to spend crypto on online purchases, as opposed to converting to fiat and spending that?
I'm sure it'll happen eventually, it's not a bad thing to give people more options of how to pay. It just doesn't seem like a huge need for anybody in countries like the US, Canada, UK, Europe, Australia, Japan (which are the vast majority of the market for companies like Paypal, Stripe, and Square).
Also fiat networks can be censored by financial institutions and government, as we saw with the financial blockade on WikiLeaks a few years ago, and have seen happen against pro-democracy protestors in Hong Kong recently. Direct merchant acceptance of crypto provides an alternative when such financial controls are put in place.
Merchant adoption of crypto is an unmitigated good for crypto, from any perspective you look at it from. It's puzzling to me when some crypto enthusiasts see no point in it, when it is really the entire point of cryptocurrency.
If a government decides to censor fiat networks to prevent certain transactions, the fact that paypal accepts bitcoin for those transactions is irrelevant. The company you're buying from as well as Paypall will still need to follow KYC laws and will be obligated not to transact with you.
In that scenario you're already fully living outside the law, you'll have to transact as anonymously as possible, exchanging crypto in secret in person or over the dark web or what have you. It doesn't matter whether major above board institutions like Paypal or Stripe accept bitcoin or not.
Instead, they offer automatic conversion (at a rate favourable to them no doubt) from other currencies. They certainly wouldn't say "If you hold EUR you can take it to a currency exchange and change it for USD, then send it to us". They would have no global hold if they did that.
Likewise, barring access to users of a certain national currency damages the global utility of that country's currency; it's silly of them to do that if there are no regulatory obstacles, and I'd argue they're strongly incentivized to find ways around those obstacles.
Whether it's paypal or not, it's greatly useful to have some way to pay for things with cryptocurrency, and payment companies have an economic incentive to add support for crypto payments as well
Yes, I don't see much point to this service without the ability to send crypto to your Paypal account. I don't buy crypto through Paypal, and I suspect nobody else that knows what they are doing does either. They've tiptoed around the idea of allowing crypto deposits by allowing instant, free, fiat withdrawals to Paypal from Coinbase (where it can then be spent). But they absolutely refuse to allow it directly.
And exchange crypto for fiat or at least USDT/USDC/some other stablecoin. Without that nobody will use the platform.
It is true that one cannot transfer cryptocurrency holdings into or out of PayPal.
ThIs iS AdOptIoN gUyS
Also I'm surprised that groups that are so freedom/privacy oriented want literally every exchange of crypto to be on-chain, public, and traceable without using a money laundering service. Sure yes wallets are pseudoanonymous but if every purchase you ever made was on-chain it would be super super easy to de-anonymize you.
Please don't do this juvenile crap here. If you have an argument to make, then make that argument.
I would like deposits, withdrawals and rotating private key access, like Coinbase does.
But sometimes I just want exposure and the ability to spend it in the same service. This checks that box.
Will this be like what they do when they offer "no transaction fee" currency conversion but build it into the rate they use?
They take a fee here and a fee there, and before you know it they've helped themselves to 4% of the takings.
Sigh, and then there's the seemingly endless nagging about verifying extra users
Would I pay less for the same service? Sure. Am I aware of the horror stories? You bet. Do I explore other services? Yes.
On the other hand, a purely digital business that already has a website, and is moving stuff internationally? Maybe there are better options.
[1] https://github.com/paypal/paypal-checkout-components/issues/...
You can still use visa.
What I get is a one button checkout on smaller sites I may not feel safe giving my credit card number for them to store and/or process.
I worked at Coinbase on the Payments team ~2018. Working to integrate PayPal was a nightmare - so much opposition to the integration from PayPal execs and compliance team. Even when we did manage to finally integrate, PayPal was only enabled for crypto sells.
Change in direction at PayPal must have come straight from the top.
In the words of the late great Steve Jobs: "are you getting it yet!??"
Everyone who thinks that bitcoin is the future needs to really wrap their head around why a $20 bill buys a nice meal instead of buying you whatever a small scrap of cotton paper with fancy ink on it is worth.
Right now bitcoin is like a castle with massive walls - everyone knows where the castle is and what's inside, but nobody can get over the walls. It makes sense to feel safe from attack. Quantum computers are the equivalent to the enemy arriving to your castle walls with a helicopter.
Also don't put it past the CCP to rapidly change their mind on bitcoin if they detect that it facilitates capital flight.
We don't need PayPal or Visa to pay with crypto. These are desperate attempts for these middleman to keep the control they have. In fact this way they can make the crypto experience worse than regular payments with hight fees etc. Pushing people away and thinking crypto doesn't work.
PayPal will likely compensate “no transaction fee” with draconian exchange rate or bid/ask spread.
None of the listed agencies do this in practice.
> privacy
Now I'm starting to believe you may actually be joking. Is that the case?
They first have to get confirmed and that can take a long time on BTC. Replace By Fee offers another attack vector on transaction finality.
Other than those two very important points, I completely agree with you.
Even without these privacy-focused wallets, you can use an HD wallet, where "child addresses" derived from a never-directly-used root key cannot be connected by a third party, unless you do something to connect them, by e.g. transacting with coins from both wallets from the same IP or in the same transaction.
The CoinJoin paper details the level of anonymity that it can offer. I could cite it to you here, but I am not convinced that you would read it if I did.
And in the PayPal use case, you wouldn't even see a single receiving address, as it's entirely opaque to that and it'd all be handled in some internal PayPal ledger. The receiver of the payment would only see a transfer to them denominated in local fiat currency. They might not even know the source of the funds was crypto at all.
If you mean at the worst possible price often forcing you before you can cash it out or presenting you with misleading choices so you are likely to stumble into their expensive option then yeah - that offer that.
The market of crypto being used to buy things is incredibly small.
However judging by PayPal track record and scary stories of arbitrarily freezing accounts I’d advice all my friends to keep their cryptos away from PayPal hands or any of their services.
Not your keys - not your coins
traditional rent-seeking high fee payment processing services are going to inject themselves into cryptocurrency at all cost. At this point the efforts is getting a little comical.
So they choose bitcoin?
The whole point is that PayPal shields the business from the volatility risk. Buyer buys in Bitcoin, seller receives local fiat currency.
I think the point here is probably that Paypal is noticing that an increasing amount of consumers have crypto and would like to pay with them, so they offer this possibility.
Bitcoin is just another currency, and indeed most businesses don't want to hold them because they need to hold their local fiat. That doesn't mean consumers don't want to use Bitcoin tho.
That's exactly what India's UPI payment transfer does. Instant, Direct, Secure, no fee
[1] https://www.paypal.com/us/webapps/mpp/security/seller-protec...
I'm also not going to put my money in a joke coin like dogecoin.
I like the blockchain, but crypto is just an implementation of it and without a use-case currently ( blockchain has multiple use-cases though).
Instead of trying to go on the emotional side with "hate-train"?
Try to convince me with facts.
Ps. I owned crypto until 2017 and then sold it then, because i didn't see a valid use-case ( and 20 k was high enough for me)
In some cases yeh bitcoin has not lived up to initial promises, literally first line of satoshis paper is no longer valid, but it could yet be like early internet and take off (or something similar)
i wouldnt write it off but yeh you are also right its not what we thought it be, the whole store of value thing these days instead of currency
Fee's are still high. Crypto still can't handle a lot of traffic as far as i'm aware today.
And what about the whole tether scam?
There are more problems to crypto currency than that any crypto solves now.
I don't know what's going on with Tether, but it definitely looks iffy to me.
Do you think maybe you have some biases against it now, because it would have made you a lot of money if you held on to it?
Nobody is paying 22$ for a 1$ product, I'm not sure how you can even remotely come to that while ignoring all the layer 2 developments.
There's a ton of really useful projects happening on DeFi, you can see the blockchain data for yourself and see that a lot of people are using it, maybe you don't see the use case, but that doesn't mean there isn't any.
What is probably biasing me, is that I had a digital magazine and the #1 hit was for "how to recover Bitcoin password".
Which also leads me to my conclusion: "There's currently no replacement for a official and trusted centralized authority in Crypto".
Personally I think the biggest issue with crypto now is, one that it promotes huge value inflation and Ponzi-like schemes (we are seeing it with BTC and ETH), two horrible energy use inefficiency. From a bitcoin transaction that requires orders of magnitude more energy to process than any other transfer of value known to humanity to Ethereum "virtual machine" for smart contracts that is most inefficient way to execute arbitrary code ever invented...
I used to be a big proponent of crypto overall. I still have some holdings in it, but I can't unsee the idiocy in PoW crypto once I saw and understood it clearly.
I wondered for a while what is so specific to crypto that it became today's tulips? (Rather than gold futures, stocks, real estate etc) and then I understood all those asset classes are already used like this. Every kind of asset that can will eventually be used in some kind of pyramid scheme. Just look at the price of gold compared to few years ago, real estate in many large cities, stocks etc. It was absolutely inevitable that crypto as it became a trusted store of value would become a vehicle for speculative bubbles/pyramid schemes.
So then the question is, can crypto fulfill the role of a currency (requiring some level of value stability) and be a vehicle for speculative pyramids at the same time? I don't think so.
Proof of Work is one problem with crypto that perhaps Proof of Stake will resolve.
The other problem is much more fundamental. How do we create crypto that maintains stability without having to resort to typical "stable coin" strategies like holding other currencies and selling/buying them to artificially adjust the value. Is it possible to create crypto that would maintain its value in the long term in distributed - no central authority manner while discouraging pyramid investment schemes.
And finally, once someone invents such crypto would anyone actually hear about it as most promotion of crypto seems to be done by people who got in early and hope for their holdings to increase in value.
There's a reason why the Fed targets a ~2% inflation rate for the USD.
It always surprises me how little cryptocurrency advocates seem to understand basic macroeconomics and unintended consequences, especially on sites like this.
What happens to economy if people buy only things that last a very long time or things that increase their productivity? What happens to economy when companies are forced to produce those things?
Inflationary economy is a total disaster. We produce things that don't last to consume things that don't last. Insane amount of human work output is wasted.
If you measure economic growth by amount of pointlessly running in circles, then yeah inflation is good for economy.
The value of a cryptocurrency is mostly tied to its adoption. Future adoption is uncertain, so there is naturally a lot of volatility right now. If adoption stabilizes, the volatility will likely decrease markedly. In fact, since many cryptocurrencies have a fixed supply (or the supply follows a predetermined set of rules), one could argue that they could end up less prone to speculative pricing than fiat.
The financial regulations around the world are often very strict. A lot of people need to go around them. Sure, a lot of them are drug dealers, gambling operators etc. but there are also people in China struggling with capital control regulations as one example.
But no. I've never met anyone in real life who uses crypto for mundane transactions, where fiat currency is an option.
I have heard from a friend that typically those 'sketchy sources' are just buying gummies from stores in legal states (cough California) and shipping them out.
My friend would get the gummies in the bags ready for retail sale. Same with other items like vape pods.
If you are wondering why Paypal never asked for your passport, it's probably because you eventually linked Paypal to another KYC-compatible entity, such as your bank (by linking your bank, sending money with your credit card, etc).
I assume in the case of bitpay you would only link your btc wallet which in itself doesn't offer KYC verifications.
Lots of other services continue to function with no such requirements. Bitpay only did it recently after many years of business and there was no regulatory change
I also don't understand how it is logically any different from the merchant accepting btc themselves and choosing to do the conversion themselves
There are many cases where businesses go beyond the legal requirements for whatever reason. Coinbase for example has explained that they make shady backdoor deals with regulators.
I have been hearing that for 11 years.
Perhaps Paypal should focus on hiring more customer service agents instead of going a full year without a direct line in the US? Paypal is one of the most egregious fintech companies in existence.
https://www.paypal.com/us/smarthelp/article/cryptocurrency-o...
Paypal's service won't change that.
I have the same problem with US dollars, that some people have more than I do, but I still use dollars often.
Go earn some crypto. People will pay you in it. If you want goods and services, go get cash with it or.... deposit it in Paypal as of today lol.
What specific standard do you need crypto to meet? Answer that for yourself. I'm fine with it.
I really don't know which pitch you are latching on to.
Crypto does not address the reality that people who have a lot of resources can simply buy a lot of crypto. It doesn't attempt to. There have been time periods, including now, where people with a lot of resources are ignoring crypto because the world is comfortable enough for them, and you can buy before they or their heirs do. The entire decade has been that way and it has been completely accurate, and it is also accurate that this makes a lot of people uncomfortable about the sustainability of the exchange rates.
Crypto addresses other playing fields. There are many intermediary liquid systems (cryptocurerncies) that you can use to send unlimited amounts to people anywhere in the world, and they can cash out in their own local currency. All the other systems had limits because governments controlled the financial institution running the system. This has nothing to do with you deciding to own a lot more crypto than you need at that point in time, it is also accurate that a lot of people do keep excess holdings because they realize that they never have to go back to the local currency, and realize that others will come to that same conclusion too.
There are many other areas that crypto does okay at, and is working to get better at.