I am sure by now you have heard PayPal has announced support for Cryptocurrencies. Initially offering BTC, ETH, LTC, and BCH support, with more to come in the future.
This is amazing news for adoption of cryptocurrencies, and will do more for adopting normies than most anything to date.
To use this feature you have to sign up to the wait list and be approved. It is unknown how long this process will take, but I do know some users who have been approved and have been using it.
If you do get accepted, you can buy crypto with zero fees for the rest of 2020. If you want to buy a little crypto this is maybe good opportunity (if you trust PayPal with your money). Keep in mind though you are unable to withdraw until it is unlocked later next year.
Like most conventional banking system, fees ultimately will be based on the amount being transferred, kind counter to traditional fees in crypto.
So what's the ugly secret?
Current block chains cannot handle the PayPal userbase, even PayPal knows this and likely part of the reason for the delays.
While BitcoinCash and Litecoin have slow but usable transaction performance, Ethereum and Bitcoin are not even remotely close to adequate. If PayPal enabled this feature for everyone and even if 1% of the userbase used it, transaction times and fees would go through the roof.
This would not help crypto adoption if the first experience is really slow transaction times. PayPal transfers are typically near instant. PayPal will shield the user from volatile transaction fees but for larger transactions the percentage based fees will far outweigh even worse case scenario transaction fees. I do suspect most transactions will be relatively small and this won't be a major issue outside of the long delays.
PayPal also plans to integrate crypto into their popular Venmo personal money transfer app that has been gaining a lot of popularity for paying friends and small businesses. In fact, I was at a football tournament with my son and the hot dog stand was taking payments via Venmo to minimize the handling of money and contactless transactions. Venmo is becoming a household name much like PayPal has, most in fact don't even know it is PayPal.
While I think PayPal (as much as I hate them) taking crypto is a huge move forward to mainstream adoption, I think it may expose the ugly side of crypto to new users if they all come at the same time.
Fortunately PalPal can likely shield a some of the issues with their own balances and fixed fees.
I am looking forward to see how this plays out. Either way, I think it will get more users into crypto and increase the adoption.
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