Last October 2020, PayPal integrated crypto purchases in its platform, earning praise from the crypto community. However, the industry executives and crypto investors are bemused by the company’s description of Bitcoin, Ethereum, and Litecoin.
How did PayPal define Bitcoin and other significant crypto assets?
PayPal’s descriptions of the significant crypto assets are not incorrect; industry executives have pinpointed the definitions’ uncomfortable wordings. For example, PayPal described bitcoin as:
“Bitcoin (BTC) introduced innovations that showed crypto could someday be as commonly used as cash and credit. It set off a revolution that has since inspired thousands of variations on the original. Someday soon, you might be able to buy just about anything and send money to anyone using bitcoins and other cryptocurrencies.”
The description had no mention of Bitcoin being used as a store of value that has become its primary use case in recent years. It does not explain that BTC is a decentralized cryptocurrency with fungibility and transportability, unlike other safe-haven assets and stores of the valley.
OnChainFX creator Dan McArdle, who shared the descriptions of top cryptocurrencies by PayPal, wrote:
The descriptions of Ethereum, Litecoin, and Bitcoin Cash have all carried the same tone. PayPal has tried to word it as simple as possible that everyone can understand.
Many users stated that the simple approach of PayPal to explain cryptocurrencies fundamentally is very useful.
A pseudonymous user said that they might demand the mainstream better, notwithstanding the descriptions’ lack of depth. The user-specified:
“While these descriptions lack any real depth or insight into what crypto it in general, or any of the currencies specifically, the average person just really doesn’t care and simple is prob better.”
In contrast, as an example, Cash App highlighted the technical specifications of BTC in its description.
Square’s Cash App highlighted cryptography, cryptocurrency, decentralization, and peer-to-peer technology to explain Bitcoin. The Cash App’s “What is Bitcoin” page reads:
“Bitcoin is the first and most well-known example of a new kind of money called a ‘cryptocurrency.’ It creates, holds, and transfers value using cryptographic equations and codes to ensure that transactions can only be completed once. One of Bitcoin’s most important characteristics is that it is decentralized using peer-to-peer technology—meaning no single institution can control the Bitcoin network.”
PayPal’s venture into crypto is optimistic.
As of November 13, 2020, PayPal is valued at $221B. When such a significant financial conglomerate integrates cryptocurrencies, which it has done at this scale, there would be improvements.
Even so, PayPal’s integration of crypto purchases and significant cryptocurrencies, like Bitcoin, is overall optimistic for the sector. After PayPal’s integration, institutional and retail demand for cryptocurrencies have increased, lifting the market sentiment.
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