A storm is brewing..
Disclaimer: this piece is largly written based on information that Paypal has never officially confirmed. Its speculation based upon information from industry sources. Recognize your risk and recognize this will not make you rich overnight!
Paypal is moving in.
When it comes to online processing agents, Paypal is likely the largest name that comes to mind. Founded by Elon Musk, and it has developed into one of the largest and most reputable online payment networks. Here is what we know thus far:
- Paypal hired eight engineers for Blockchain Research earlier in 2020.
- Direct point of sale to its 325 Million Users.
- Store and send - full functionality.
One of the primary roadblocks to new Cryptocurrency users is the steep learning curve. Wide variety of wallets, cold/hot storage, diversity of projects.. Getting involved with cryptocurrency can be scary! Having an intermediary like Paypal get onboard not only shows blatant support, but brings a lot of users into the space.
Its also important to understand that Paypal has been semi-involved with the crypto space already. In the last two years they partnered with Coinbase to allow for exchange between their services. Its not the first time in the space, and its clear they're looking for a more permanent stake in the ecosystem.
Questions to think about..
1. Where will the liquidity come from? The exchanges they chose to rely on for liquidity will notice a serious demand increase. Given that many platforms have associated value based coins (ex: BNB), then there is room to potentially profit from the partners!
2. Who is their customer? Do we thinking that there is magical crypto users just waiting to buy and use via Paypal? From a functionality standpoint, its not very functional... It makes it more complicated and layers to the ease of use for the more advanced users.
My perspective is that it will not bring a massive influx of users because of it being added, rather an upward force from ease of purchase on a rapidly inflating asset. Think adding gasoline to a fire, rather than lighting it from scratch. Let me explain!
One of the biggest roadblocks in 2016/2017 was the barrier to entry. It used to be hard to buy crypto! Integration with a massive conglomerate like Paypal allows for the difficult process to potentially be skipped. Quicker path between A and B benefits all users!
3. Is there a real benefit here? Beyond exposure and hype, there isn't that much tangibly benefits the consumer. It will come with high fees, surveillance and ultimately it does not change one fact: not your keys, not your crypto.
Insight from their CTO: Sri Shivananda
“We are a strong believer in the potential of blockchain. The digitization of currency is only a matter of when not if.”