Last year, the digital payments company – PayPal made a big step in the crypto market. Now in the U.S., the platform allows users to buy, sell, and hold cryptocurrencies, including ethereum, bitcoin cash, bitcoin, and litecoin.
Today, PayPal stock increased nearly 6% to near 261 in trading extended on the stock market.
The mobile wallet – Venmo that PayPal owns, also allowed customers to buy and sell cryptocurrencies.
You can now start investing just 1 dollar and don’t have to open a particular account to deal in crypto coins.
However, the coins you’re buying are not yours technically.
General partner at BlockTower Capital, Mike Bucella, said you don’t necessarily hold your bitcoin, but PayPal manages the wallets.
When you purchase a bitcoin, the platform gives you two options to make the ownership official. There are public and private key pairs. The public key is the address of your wallet, and the private key allows you to control that wallet. So, in PayPal, the company handles the private key, but you can access your public address.
The company explains that you can not transfer the crypto from your account to other accounts on or off PayPal. It is a limitation that feels odd. It means that users can not move bitcoin to their cold storage. Also, they can not transfer tokens to a wallet outside of PayPal.
Mike Bucella explained that it makes perfect sense for PayPal from a business perspective while the user is minimal in terms of what they can do with their assets.
This idea is not very popular as not everyone wants others to safeguard their crypto holdings.
Birla said that if you lose the private and public keys, you lose your coin. However, for someone who is a novice in the crypto space and is not comfortable holding its own private and public key. Hence, it might be safer to give that access to PayPal. PayPal’s interface is pretty easy to use.
For example, Ripple’s former CTO lost at today’s token price his private key that was about $400 million worth of bitcoin.
Bucella tested the service out as soon as it launched on PayPal. He said that it is a seamless user experience. If you plan to buy and hold your bitcoin and don’t want to custody your crypto, then it makes sense.
If you have a PayPal account, you need to click the button under bitcoin that says Buy to get into the crypto game.
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