Paypal’s entry into the cryptocurrency industry continues to expose the gap between the less enthusiastic traditional cryptocurrency participants and the non-cryptocurrency participants who recognize this move. Non-cryptocurrency participants such as Morgan Stanely analysts all agree with the view that the payment giant’s move will lead to an increase in the number of people adopting cryptocurrencies. Nevertheless, analysts believe that this move will not immediately improve the company’s profits.
The analyst explained in a note that the move “should expand the acceptance of online cryptocurrency, which has so far been stagnant at 1% of the top 500 Internet retailers”. Nevertheless, it is speculated that Paypal’s motivation for accepting cryptocurrencies is more to keep up with rival Square than to help push cryptocurrencies to the masses.
Violation of cryptocurrency principles
At the same time, critics of Paypal’s cryptocurrency entry, such as the crypto hardware wallet maker Satoshilabs, are less optimistic about the payment giant’s switch to Bitcoin. Satoshilabs pointed out that once, a former Paypal executive once called Bitcoin a scam. He said: “The service will be completely custodial, which means that users will not have the keys to their coins.” This service condition It seems to violate Bitcoin’s ideal of decentralization and elimination of third parties.
According to Satoshilabs, reducing reliance on third parties is particularly important when “exchanges are losing user funds, often leaving them (customers) helpless”. Although Satoshilabs opposed Paypal’s restrictions on the movement of coins, the encryption hardware manufacturer did acknowledge that the payment giant’s regulated entity status may attract new users.
Not your key, not your coin
Brad Garlinghouse, CEO of Ripple, also echoed the idea of the Satoshilabs team. His XRP token is not in the list of tokens that Paypal customers can purchase.Garlinghouse wrote on Twitter, questioning PayPal’s move Say Yes:
2 steps forward, 1 step backward… It’s nice to see payment pioneers come in, but what is disappointing are some basic cryptocurrency principles/benefits. I suspect that PayPal is worried about (waiting…) regulatory uncertainty, which has affected its promotion on multiple levels.
Garlinghouse and others seem to have questioned the payment giant’s clarification to customers that “you own the cryptocurrency purchased on PayPal, but you will not get the private key.” According to Satoshilabs, the statement indicates that Paypal’s claims of digital currency Advocating instead “undermines the key principles of cryptocurrency.” Nonetheless, others like Virgin Galactic chairman Chamath Palihapitiya are still optimistic about Paypal’s move.
At the same time, it is reported that Paypal is taking action to reiterate its new commitment to cryptocurrency, and will soon acquire a cryptocurrency custody service company Bitgo. The report quoted an unnamed source as saying: “PayPal is already in talks with BitGo and may conclude a deal within a few weeks.” However, if the negotiations fail, the payment giant is said to seek new purchase targets.
In addition to the initial announcement, the latest report appears to be pushing the price of Paypal stock. After the news was announced, the stock rose 5% on October 21.
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