Paypal in the first quarter of 2021, will roll out its support for Cryptocurrencies, bitcoin being the first according to its release on October 21st. This is big and great news for all crypto holders and believers. It means a whole lot of things for blockchain technology- the most obvious is a worldwide adoption. PayPal is one of the largest payment processors in the world.
Having its headquarters in California, United States, Paypal has up to 346 Million active accounts around the world. When Cryptocurrency has added it means the blockchain technology is onboarding more than 300 Million new users and holders. Additionally, it allows United State residents to know more and use Bitcoin for their payments.
Not just Bitcoin, many other alternative coins (altcoins) will also be added to Paypal. This means huge visibility and adoption for them too. It might be the time when different crypto projects can showcase what they have been working over the past years. New blockchains may moon shot if and when they are included on PayPal.
The inclusion also means that more people will be able to use the payment processor too. Many who have been excluded from receiving PayPal payments because of their location may be allowed to receive crypto payments since it is borderless. Payments will be transparent since transactions can be viewed on the explorer.
The bottom line is that many of blockchain’s great features will be visible and evident to all. There will be an increase in adoption for large corporations and influential people.
Just like blowing up a balloon, as the great characteristics of the blockchain become appreciated, so also the inherent weaknesses will be more obvious.
An increase in the number of users means an increase in transaction request counts per day. For blockchains that determine their fees competitively like in Bitcoin and Ethereum, there might be an increase in the average fees. For bitcoin there is currently no remedy, for Ethereum, the remedy might be Eth2. The huge fees may not be surprising for PayPal users since it charges an average fee of 5.4% + 0.30$.
Scalability challenges in Bitcoin may be a strange issue for Paypal users who are new to crypto. Paypal processes transactions way faster than Bitcoin. Hopefully, this can be compensated for by running a custodial wallet (which will only affect internal transfers) and the addition of more scalable blockchain coins like XRP, DGB, XLM, XDC, etc.
PayPal payments can be reversed with a lower fee on a reversal but crypto payments cannot be reversed. This may create fears in the hearts of many. But running a custodial wallet just like crypto exchanges do will put an end to this though it may spark low confidence in the hearts of many crypto enthusiasts.
Hard Forks are somewhat inherent weaknesses of blockchain technology, attacks due to reorganization, nodes going offline, and differences in belief, etc. are few reasons for chain split. If a chain split occurs for a coin on a cryptoprocessor as large as PayPal, this might be very ugly. The team at PayPal may be forced to take sides which might mean a huge loss in revenue for them. Oh, you don’t believe? It’s possible for any of the huge blockchains out there today. Bitcoin has become huge when there was a chain split or a hard fork.
PayPal may also come under fire from the Government of countries that banned crypto. They may be alleged for supporting terrorists.
No matter how meh, or ugly the possibilities are, when PayPal adds cryptocurrencies on its platform, there is an assurance for crypto holders that the tech is gaining the right recognition. The great possibilities far outweigh the pitfalls for there is no tech without a pitfall.
I am Ayobami Abiola from Nigeria. I am a Cryptocurrency enthusiast who like to write about creative and great innovations- The wonders of the blockchain technology.
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