Perhaps inevitably, digital payment and transfer platforms have begun to collide with bitcoin and other cryptocurrencies. When the cryptocurrency market first emerged and the concept of “digital currency” was heralded as something new, you might have come across some skeptics who didn’t really see the benefit when services like PayPal and Venmo were already popular. It’s a valid stance insofar as the idea of being able to buy things through exclusively digital means wasn’t at all new. Though people ultimately came to realize that bitcoin was about more than just providing a digital means of paying or transferring funds.
Now, however, a few years into bitcoin’s growth as a prominent alternative currency and investment asset, we’re starting to see those same old digital payment platforms getting competitive. In other words, as cryptocurrencies have gained steam, these platforms have evolved and improved as well. Now, focusing on two of the biggest names in the conversation, the question seems valid: will PayPal ultimately help or hurt bitcoin’s growth?
In some ways it does seem as if PayPal may inhibit bitcoin’s growth (and that of other cryptocurrencies). This is because Venmo – a company some don’t realize is actually run by PayPal – has been beating bitcoin in peer-to-peer payments. Back in 2016, this was credited to Venmo’s social component, but it may also just come down to simplicity. While plenty of P2P payments do happen via bitcoin, the currency’s value has ballooned so much (even now, when it’s down more than 50 percent from late November) that it’s somewhat cumbersome to work with. Put simply, would you rather highlight a friend’s name and plug in $15, write a message, and press send? Or figure out a bitcoin address and try to send 0.0023 bitcoin to it?
There’s also the fact that PayPal has made itself relevant at some of the bigger and more significant platforms that have made headlines for accepting bitcoin. For instance, major online retailers like Overstock were some of the early triumphs for bitcoin, yet many already accepted PayPal, meaning customers already had a convenient means of digital transfer. More recently, the online gaming business has gotten in on bitcoin, but there too, PayPal has made itself a force. Said one gaming site based in the UK, PayPal is “set to continue its world domination” in 2018. One can be left with the impression that avenues for cryptocurrency are, to some extent, being cut off.
On the other hand, this is a fairly unusual situation in which two entities that would seem to be competitive in numerous ways can actually help one another as well. For instance – most simply – PayPal can be used to buy bitcoin. Mind you, it’s not usually the most straightforward process. Most (if not all) cryptocurrency exchanges keep users from paying directly with bitcoin. However, there are various direct trade and loan options that allow people to purchase bitcoins from individuals using PayPal transfers. Should this relationship deepen in the years ahead, PayPal and bitcoin could actually grow alongside one another. In fact, that may be the inevitable result of all this.
Regardless, the relationship has become one to watch. It once looked as if digital payment and P2P programs would exist in a similar but different area than that of cryptocurrency. But they’re intersecting more and more, and will certainly continue to affect one another. Posted by Myhardwarewallet on April 11, 2018 in Crypto, Payments