When Paypal announced they would integrate Bitcoin payments through BrainTree – a payment processing company owned by Paypal – the entire digital currency community was enthusiastic and excited about the future of Bitcoin. This announcement was seen as a clear “thumbs up” from one of their biggest competitors in the world of online payments. However, up to this day, not much has happened ever since. It makes you wonder what the creator of Paypal has to say about that.
Paypal – Just as Disruptive as Bitcoin Back in the Day
Most people fail to realize that Paypal was originally created with the mindset of becoming its very own currency, which was backed by other fiat currencies around the world. Back in the days of the birth of Paypal, regulation and legislation regarding online payments were far less strict than they are these days, and hardly any of the “higher ups” was paying attention to e-commerce at that point in time.
Ever since then, paypal has become a household name when it comes to sending and accepting money on the Internet. By using traditional payment methods such as wire transfers and credit or debit cards, and giving them a digital jacket so you didn’t have to expose that information to anyone else but Paypal, a whole new breed of internet payment systems was born.
It goes without saying that a lot of people weren’t too fond of the idea of paying online back in the 1980’s and 1990’s. The Internet was this new disruptive technology that would either become one of the biggest inventions of the 20th century, or fall flat on its ass before the millennium was over. Little did people know at that time what a success the Internet would prove to be 25 years later.
However, more and more people started seeing the benefits offered by Paypal : accept payments online, and people could still use their traditional payment methods in order to do so. it would be a win-win situation for all parties involved. As we all know by now, the only real winner in this scenario is Paypal, with their ludicrous fees of up to 3.5% per transaction between users, plus additional fees for adding and withdrawing funds to and from your Paypal balance.
Peter Thiel, the creator of Paypal, should be applauded for his efforts though. Without his gutsy move of creating the world’s leading online payment system, we might have never seen the birth of Bitcoin either. It’s hard to judge whether or not that statement would actually be true, as history has taken its course already. Just think about what a different world we would be in right now if it wasn’t for Paypal coming into existence at the right time.
Peter Thiel on Bitcoin : Mixed Bag
“PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.” – Peter Thiel, Creator of Paypal
Truth be told, if you are not tech savvy at all, both payment systems are incredibly difficult to use. However, if you have some knowledge of how computers and the Internet work, Bitcoin proves to be far less of a challenge compared to Paypal in some regards. Opening a new account is one of the areas where Bitcoin really trumps the user-friendliness [or lack thereof] of Paypal.
However, when it comes to using either service, there are some similarities. Buying Bitcoin requires you to get an account on an exchange of some sorts, and the entire process will take up a few days. The same can be said of Paypal, as verifying your bank account and credit card before using them without limitations also requires several days of time.
“As long as you have to have dollars to pay your taxes, if you don’t have dollars to pay your taxes, people with guns will come after you and lock you up, or do something bad to you. You can use Bitcoin to pay your taxes. You still have to convert Bitcoins into dollars to pay taxes. So on that level, it doesn’t threaten the dollar as a reserve currency, which is ultimately backed by military/law enforcement power.” – Peter Thiel, Creator of Paypal
That statement seems rather odd to me – and possibly to you as well – as Paypal has recently announced they integrated Bitcoin payments through one of the companies they own. In fact, one could go as far as saying that Paypal sees the same potential in Bitcoin as it sees in traditional payment methods such as bank accounts and credit or debit cards.
We all know that Bitcoin will not be replacing fiat currencies in the near or distant future, but it will bring a new level of technology and insight to existing financial infrastructures. Whether or not we will see any government fully embrace that technology – and not just Bitcoin as a currency – remains to be seen at this point, but we can only hope so.
Paypal & Bitcoin : Still No Friends
Despite Paypal integrating Bitcoin through BrainTree, it has proven to be incredibly hard to find a merchant who is accepting the service. And that is the major downside of the announcement by Paypal, as it remains up to the seller to “enable” Bitcoin payments via Paypal, yet hardly any sellers know about this feature at this point in time.
The foundation for a mutual beneficial partnership between Paypal and Bitcoin has been laid, but it will take some time until we actually see Bitcoin money flowing in to Paypal’s ecosystem.