How to purchase Bitcoin with PayPal

How to Purchase Bitcoin with PayPal

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by Amelia Scott — 1 month ago in Blockchain Technology 5 min. read
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Everybody has heard of Bitcoin ( BTC). PayPal’s cryptocurrency services have introduced millions to Bitcoin. Nearly 350 million PayPal account holders have now an easy way of owning the fastest-growing asset class in history.

The news of PayPal’s new offering has elicited mixed reactions from the crypto community, with some expressing cautious optimism and others voicing outrage. This article explores the reasons PayPal’s new offering has generated such mixed reactions and examines both the positive and negative aspects of buying crypto on the PayPal platform. If you are wondering how to buy Bitcoin with PayPal, this article will show you.

Users must first log in to PayPal. After logging in, users will need funds available. This could involve linking credit cards, debit cards, or bank accounts.

PayPal requires all users to undergo Know Your Customer verification due to the stringent requirements surrounding crypto.

KYC verification requires the submission of documents that prove user identity, such as a driver’s license. You may need to submit a copy of proof of address and your identity card for verification. A W-9 tax form must be submitted by all interested users.

The requirements to purchase crypto through the PayPal platform are simple, as readers will be able to see. However, to meet KYC and Anti-Money Laundering measures, exchanges will require that users submit a driver’s license for identity verification. This can provide additional benefits, such as a lifting of the daily maximum withdrawal limit.

Interested PayPal users should conduct their research and do their homework to find out about exchange requirements. It may be prudent to compare exchange requirements with PayPal’s when you are considering investing.

Before users start buying cryptocurrency with their PayPal accounts, it is prudent to consider both the benefits and drawbacks of purchasing Bitcoin through PayPal.

Selling Bitcoin via PayPal has its Upside

There are definitely upsides to introducing more than a quarter-billion users to cryptocurrency. Although the crypto community might not be willing to admit it, PayPal is providing a benefit to the industry by offering a low-risk approach to crypto ownership.

Another way to view it. Let’s say that a PayPal user buys cryptocurrencies through the platform. They should conduct additional research online about the asset, and cryptocurrencies generally since they have already invested in it. It is normal to want to know what one has.

It is therefore essential to continue digging into the crypto rabbit hole. This knowledge-hunger should lead to a desire to own their digital assets.

This offer is most beneficial to novice cryptocurrency users who are just starting to use them. This benefit is only available to those who are tolerant of low risk. These users may find buying crypto on a trusted platform such as PayPal to be a more pleasant path to “ownership.” PayPal is a well-known brand in online payments, so their adoption of crypto could be seen as a vote for confidence.

When transferring Bitcoin via the blockchain, it can take up to 10 minutes for bitcoin to appear in the user’s wallet. How about the Bitcoin to PayPal transfer? Instant.

PayPal partners with many stores to further incentivize users. PayPal users can make eligible purchases with their crypto holdings by partnering up with interesting stores.

Many crypto enthusiasts in the community see this move as a scam to get people to give up their ownership. It is best to remind users of the old crypto saying: “Not your keys, but your coins.”

After the positive aspects of the article have been discussed, this article will present popular arguments why you shouldn’t use PayPal for Bitcoin and other cryptocurrency purchases.

Also read: Top 10 Job Search Websites of 2021

Why You Shouldn’t Purchase Bitcoin with PayPal

There are many options available to purchase cryptocurrencies. You can use a centralized or decentralized exchange (CEX), or even a crypto wallet. However, ordinary consumers may experience higher risk aversion if they don’t fully understand the technology behind cryptocurrency.

PayPal makes it easy to purchase digital currencies. PayPal makes it easy to buy Bitcoin. However, there are some important pitfalls that users need to be aware of before using the platform to purchase crypto.



With Crypto Exchanges, Users must go Through A Similar Approval Process

PayPal users must prove their identity in order to purchase cryptocurrencies through the platform. To be able to buy crypto, users must verify their identity by providing documents such as passports.

However, most cryptocurrency exchanges require their customers to go through a similar approval process before they sign up. Users may be better off buying crypto from an exchange than from PayPal.



Not Cryptocurrencies, But Their Equivalent in Fiat Currency is Held by Users

PayPal is not the right place for crypto users to store their coins. Bitcoin and all other crypto coins are under the company’s custodianship. PayPal users cannot directly “own” their crypto. However, users can’t transfer crypto assets from PayPal to their own digital currency.

Experienced users will soon discover that it is not possible to send Bitcoin to PayPal or to swap currencies within the app. PayPal does not offer its users a digital wallet, or even a wallet address.

The absence of private keys indicates that PayPal account holders with cryptocurrency holdings on their platform are technically still holding fiat. Users can only cash out their crypto in fiat currency. This also means that Bitcoin cannot be transferred to PayPal.

Why would PayPal offer cryptocurrency? PayPal seems to be using this approach to get exposure to cryptocurrencies. PayPal accomplishes this by borrowing funds from its customers. They also gain publicity by encouraging crypto acceptance, while at the same time minimizing their risk.

Another problem is the limited capabilities PayPal users have with crypto. Users can’t transfer cryptocurrencies from their PayPal accounts to their wallets. They can also not swap between cryptocurrencies within the app. The technical reality is that PayPal users don’t hold any of these cryptocurrencies. However, PayPal does.

Users cannot Lend Their Crypto to Others

Decentralized finance uses smart contracts. These are self-executing algorithms that trigger when predefined conditions have been met. Smart contracts allow financial transactions to be completed without the involvement of third parties.

Devi’s ability to produce high yields is one of its main attractions. Interest rates can’t be controlled and are therefore free to market forces. For loans of certain coins, it is not unusual to hear double-digit yields.

Lenders can get significant returns from Bitcoin, which is why it’s often compared to banks. PayPal doesn’t give users the option to earn passive income from their crypto holdings. This is a major drawback for crypto investors looking to maximize their returns.

Also read: Top 10 Successful SaaS Companies Of All Times

Crypto Exchanges may have Lower Fees for Users

PayPal is known for its high fees. PayPal Bitcoin fees are not an exception. However, cryptocurrency exchanges are notorious for charging outrageous spreads. Spreads refer to the difference in the ask and bid prices for a currency pair.

If a country allows users to deposit fiat directly into an exchange account, they are considered lucky. They can buy cryptocurrencies and keep their assets in their wallets thanks to regulations.

It can be difficult to buy cryptocurrencies on a crypto exchange or set up digital wallets. There is more work involved and you need to be more educated. However, knowledge leads to the realization that crypto assets are best held directly by users.

They will be able to see that they not only have complete and total control of all their assets but also that they can make decisions about them. This recognition can lead to higher returns. This is possible because Defi offers many passive income opportunities. Staking to support a Blockchain network and liquidity. Yield farming to decentralized exchanges to ensure they run smoothly.



There is A Limited Selection

There are thousands of cryptocurrencies in existence. Many of these cryptocurrencies are small-cap or microcap coins. Learn More about Market Capitalization. Investors can make the most of microcaps because they offer huge upside potential. Microcaps, however, have the highest upside potential, but also come with higher risk.

PayPal offers only four popular cryptocurrencies. This is because of risk aversion. These coins are among the oldest cryptocurrencies, with Ethereum and Bitcoin leading the charge.

These coins are more established and have matured. These four coins are therefore less vulnerable to price fluctuations.

Amelia Scott

Amelia is a content manager of The Next Tech. She also includes the characteristics of her log in a fun way so readers will know what to expect from her work.

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