PayPal announces its new APP feature this week which will support Bitcoin, Litecoin, Ethereum and Bitcoin Cash. The announcement comes as breaking news as Bitcoin price jumps and went over $13,000 in a short period of time. This addition has been great news for most of us that hopes crypto can get more coverage, and it definitely did that. While all the news outlets are talking about how PayPal can help push cryptocurrency to its billions of users, none actually talked about how it will work. Here is what we know about the current hot topic and should we all feel positive about it?
Buying and Selling
Many of us have been using PayPal to buy cryptocurrency from exchanges and crypto merchants for a long time. With this new feature by PayPal, things have changed. PayPal allows you to buy crypto directly on the PayPal App with just a simple click, meaning buying crypto can be much quicker and simpler as all of your data is already on the PayPal App. You will also have an option to sell back directly to PayPal and get fiat back to your PayPal account which is also very simple.
If you are someone who is new to Bitcoin and to cryptocurrency and is looking to invest, this is a great App to start with. The quick buying and selling is a good way to make profit if you can catch the market trends. However, there is a catch about this, the crypto only circulates within PayPal and you are not allowed to send it to your own wallet or exchange, or even to other PayPal accounts. To put it simply, if you buy Bitcoin on PayPal, it is bound to your PayPal account. You will only be allowed to Buy, Sell or Hold.
So, Where Are My Coins?
If you are familiar with cryptocurrency and wallets, you might be asking this question: Isn't just like an exchange where you do not have control of your keys, hence not in control of your coins? The answer is yes, and to break another bad news: you cannot send your coins anywhere, making it not utilizable. Its sole use is to be bought and sold for profit, as things stand.
When you buy Bitcoin on PayPal, you will not get any mnemonics or recovery keys. If the PayPal App is down or if PayPal restricts your account, your coins will be stuck in PayPal with no way to restore it. This is a very big risk if you are looking to invest long term in Bitcoin or looking to hold a large amount.
Crypto community’s Opinions
The opinions on this are highly divided, mainly due to how PayPal made it to be very custodial and how the coins won’t be able to leave the PayPal’s system. Some also criticize how PayPal has made Bitcoin looks like a way to make money and similar to a once highly controversial App: Robinhood.
Nevertheless, it is very clear that PayPal’s integration of Bitcoin will make millions of people know about Bitcoin and cryptocurrency which can be very good for adoption. PayPal has also put the effort to educate people about crypto on the App. Lastly, PayPal might be able to add sending and receiving function in the future which enables more commercial usage.
Despite the negative criticism from PayPal being a custodial wallet and not allowing users to transact their coins freely, PayPal will no doubt bring a lot more attention to Bitcoin. This was already reflected on the recent rise in price from the past few days. In the long run, PayPal can still add better features such as allowing users to transact normally and push more Crypto educational contents which will hopefully benefit the ecosystem as a whole.
If you are a proper crypto investor and already went beyond just testing the waters, it is definitely better to use a secure, air-gapped, cold wallet like the ELLIPAL Titan instead. You can purchase a wide range of currencies on our ELLIPAL App using your credit card and then exchange it to other currencies when you want to invest on something else. All of this happens on the secure air-gapped system of the ELLIPAL Titan cold wallet which will protect you from any hackers, both online and offline.
Most importantly, ELLIPAL is a non-custodial wallet, meaning your coins belong fully to you and you have 100% control over it. With the mnemonics (recovery key) you get when you create your new account, you can recover your crypto anytime, anywhere. It is definitely a more superior option for anyone looking to take crypto seriously.