PayPal has been in the news within the domaining community due to it’s banning of Epik and Namebio, reported earnings yesterday.
PayPal reported revenues of $5.46 billion and adjusted earnings per share of $1.07 in the third quarter of 2020. Both were ahead of analyst expectations of $5.43 billion and $0.94, respectively.
TechCrunch detailed how the company plans to roll out it’s cryptocurrency program.
The company aims to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first, initially in the U.S.
Speaking to investors during the earnings call, Schulman also noted when PayPal plans to bring crypto to more users and geographies. He said the ability to buy, sell and hold cryptocurrencies will first arrive in the U.S., then will roll out to international markets and the Venmo app in the first half of next year. (Currently, PayPal is offering U.S. users to join a waitlist for the new crypto features in-app).
“This solution will not involve any additional integrations, volatility risk or incremental transaction fees for either consumers or merchants, and will fundamentally bolster the utility of cryptocurrencies,”
As someone who is not unfamiliar with crypto I can only be both optimistic at integration yet reserved when the idea of their fee’s has yet to be determined. You see, fee’s are very important in the roll of using tokens in both sending and receiving of “money”. In fact the whole purpose of fiat/digital tokens is to create a secure, fast and low cost exchange system.
Something big business and government is not likely high on.
Well on one hand you might tout that it’s decentralized, and anyone can adapt it in any way they want…
If that’s so, then isn’t paypal at liberty to charge whatever fees they want? Isn’t that the whole point? No central authority dictating fees?
You can use any wallet yourself, your own wallet even, and only pay network fees…You’ll never have to pay paypal fees to send that way…
No one FORCES you to receive crypto to a paypal address either. If it’s ‘expensive’ to buy from paypal, just go back to buying it where you are right now…
The real nightmare is all the scam claims they are about to deal with. Do you think arbitrating scam claims should be a FREE service for crypto kiddies too?
True, true I see your point but this all begs the question, is a technology designed to move faster than SWIFT, more secure and cheaper, going to be something any large financial institution willing to adopt if it means less revenue?
We should add that paypal is not switching over here to a blockchain based system and after all why would they want to. Can’t charge huge fee’s that way, offer faster, cheaper and more secure services hurt the bottom line.
This is why I tend to lean toward the blockchain technology matter far more in other areas than forcing crypto on people without the benefits.
It has been a while since I read Satoshi Nakamoto’s original paper, this is what I recall.
The miners that are built to produce all bitcoins do not become paper weights once all the coins have been minted. The miners were always intended to be moved into the position of transaction processing, and in that roles the miner owners profit by taking a small amount for each transaction processed. In other words creation of miners is rewarded by them being able to generate profit forever.
So the bitcoin network was never intended to be used for free, it will have a transaction cost associated with it. In other words it will be the same as PayPal, Western Union etc. The idea is the cost is much lower using Bitcoin, be it is not zero. At the very least, the electricity the repurposed miners use will still need to be paid for.
While its true that mining will continue for a very long time, the rate of production goes down dramatically with time. If Bitcoin is considered a success, then the transaction processing rate will greatly increase as the coin creation rate is decreasing. The entering of PayPal would also greatly increase that transaction rate. So miners move from making money minting coins to making money acting as “tax collectors”.
Perhaps PayPal will purchase one of the big mining farms to be repurposed for transaction processing ….
Something else to note well. There is a significant potential “exploit” of Bitcoin or any other crypto currency. Internal to the processing of coins is a voting system that is distributed to ensure no one controls the over all system. But, should anyone control over 50% of that voting system (= the part that processing the transactions) then they in effect OWN ALL BITCOINS as they decide success or failure of ALL transactions across the network …. Something to think about as more and more commercial entities enter into the Bitcoin back end system, and what might happen if they were to work together ….
I bet the cost of such a back end system is relatively small to a company like PayPal.
Yes, this is not a case of paypal using bitcoin how one would have assumed intended, on chain.
People hear the term crypto and bitcoin and assume the tech just follows the token.