In late October, when the company revealed it will endorse the purchase, selling, and keeping of digital currencies for U.S. users, PayPal lit up the cryptocurrency industry.
This coincided with the beginning of Bitcoin’s great step, resulting in BTC peaking at just below $20k. Erik Lowe, Pantera Capital’s head of content, said: “PayPal’s October 21st launch announcement coincided with the service’s availability for select US accounts. It was a gradual roll out. You can see a spike in the chart the day of the announcement.”
Also others believe the foray of PayPal into the market is enormous in that it opens up a whole new demographic of cryptocurrency. However a swelling tide of resistance against the payments giant has been building ever since the announcement was made.
The main features of Bitcoin, and what makes it an appealing prospect for so many, lie in it being a decentralized value system for peer-to-peer. Some claim that PayPal, as a middleman, has no organization that interferes with this dynamic.
To add, PayPal cryptocurrency trading comes with attached requirements. Users do not send crypto in or out, according to their FAQ. They don’t get a private key either which means that the payment giant practically controls cryptocurrencies purchased on its network.
Antonopoulos waded into the controversy by saying that Bitcoin bought on PayPal is not true Bitcoin. He notes that PayPal Bitcoin raises counterparty risk visibility, in that consumers have no say or insight into what is going on behind the scenes.
“If you buy your Bitcoin on PayPal you didn’t buy Bitcoin. What you bought is, exposure to the price of Bitcoin mediated by a custodian who you hope is doing good risk management practices. But, who you cannot audit for their actual existence of reserves.”
With that in mind, PayPal Bitcoin should only appeal to noobies, who, for whatever reason, prefer the involvement of a middleman.