While Bitcoin has made a lot of progress as a new form of electronic money, PayPal is still the standard when it comes to online money transfers. Due to PayPal’s popularity online, many people think it would be the perfect match for trading into the Bitcoin ecosystem; however, there are key differences between these two payment options that make them mostly incompatible.
By: Arthur Crowson | Jan 8, 2020 | Modified Mar 20, 2020
PayPal was launched back in 1998, and its original goals were somewhat similar to Bitcoin’s. PayPal wanted to create a new form of internet money that would be frictionless and make sending payments as easy as sending an email.
However, due to the centralized nature of PayPal, the company was never able to be as innovative and boundary-pushing as they hoped. That said, PayPal eventually became the de facto standard for online payments.
However, PayPal hasn’t worked well with Bitcoin up to this point. This is because, unlike cryptocurrency payments, PayPal transactions are not finalized right after they are made. Due to this difference in how payments are processed on these separate platforms, they are mostly incompatible for trust-less trades between each other.
The same goes for using PayPal to buy popular alt-coins like Ethereum, Tether and Litecoin. PayPal and cryptocurrency exchanges simply don’t play nice together. You’ll likely have to find an intermediary to buy Bitcoin or any other cryptocurrency.
Despite the difficulties associated with purchasing cryptocurrency via PayPal, a large number of people still decide to take this route due to their level of comfort with the online payments platform. PayPal is a great option for anyone who needs some cryptocurrency in a hurry because payments can be made instantly. Despite the fees and low limits, there aren’t many other solid options to choose from when you need some Bitcoin fast.
There are a number of disadvantages to using PayPal to purchase cryptocurrency, and this option should probably be avoided if you are not in a rush. Buying Bitcoin and other cryptocurrencies with PayPal will come with higher fees than even using a credit card. Additionally, there are extremely low limits on the few platforms where PayPal is even accepted as a payment option.
Perhaps the biggest disadvantage of using PayPal for Cryptocurrency is that it’s simply very difficult to do. Most major cryptocurrency exchanges do not accept PayPal at this time.
PayPal is not a cryptocurrency; it is an online payments platform. It is possible, however, that PayPal will one day integrate Bitcoin into their platform as an accepted currency.
While you cannot transfer Ethereum to PayPal directly, it is possible to to make this movement of money with Coinbase as a middleman. First, you will need to send your Ethereum to Coinbase (if it’s not already on the exchange). Next, you will need to sell your Ethereum for your local fiat currency of choice. Lastly, you can withdraw your fiat-denominated funds into your PayPal account.
PayPal does not currently accept Bitcoin; however, a subsidiary of PayPal, known as Braintree, does allow merchants to accept the cryptocurrency for online payments.
Yes, you can use your PayPal credit card to buy cryptocurrency; however, it should be noted that buying crypto via a credit card comes with the same sorts of drawbacks found with buying cryptocurrency via PayPal.
PayPal and cryptocurrency are not really comparable. PayPal is an online payments platform while cryptocurrencies are a completely new form of money. Whether PayPal or cryptocurrency is better for you will depend on your specific use case. As a payments mechanism, cryptocurrency is usually a better option in unregulated markets.
You cannot fund Coinbase with your PayPal account, but you can withdraw funds from Coinbase into your PayPal account.
PayPal does not have its own cryptocurrency; however, it was originally involved with Facebook’s Libra cryptocurrency project. PayPal has since dropped out of the association involved with the Libra project.
PayPal does not appear to be harshly critical of cryptocurrency, but that does not mean they like cryptocurrency. In general, PayPal has taken the same approach as many other online payment processors in that they aren’t in any particular rush to adopt cryptocurrency into their platforms. However, PayPal would likely integrate Bitcoin or some other cryptocurrency in a situation where the technology is able to solve some sort of business-related issue for the company.