The CEO of eBay made headlines in recent weeks by claiming that PayPal is eventually going to have to integrate digital currencies, such as Bitcoin, into their payment platform. While this should be huge news for anyone interested in mainstream adoption of Bitcoin, the reality is that many purists in the Bitcoin community are actually upset by this move. After all, one of the main tenants of Bitcoin is that we no longer need various third party payment providers, such as PayPal. The online payment giant has also noted that Coinbase and Bitpay are now competitors of theirs, which could be one of the main reasons they’re looking to integrate with new digital currencies in the first place.
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One of the main reasons that PayPal may want to add the bitcoin as an acceptable currency on their platform is that many of the international payments in the world currently come with a large amount of fees. In fact, there are certain situations where an international payment may not even be possible if you’re dealing with someone in a country with a relatively immature banking sector. PayPal could allow people from all over the world receive payment in bitcoins, which could then be converted to their local currency. This is actually one of the main use cases mentioned by eBay’s CEO during his interview on CNBC about the topic, and international remittances have long been touted as one of Bitcoin’s many killer apps by the cryptocurrency community as a whole.
Accepting Bitcoin on eBay
Another obvious benefit of PayPal embracing Bitcoin and other forms of digital money is the fact that Bitcoin users will be able to use their bitcoins to purchase items on eBay. Although it is still just an auction website, the reality is that you can purchase basically anything you can purchase at any other major online retailer while shopping on eBay. Overstock’s CEO has mentioned the fact that the move by his company to accept Bitcoin should eventually tip Amazon in the same direction. The validity of that statement is still up for debate, but it could definitely gain much more credibility when you’re talking about eBay rather than Overstock.
PayPal Will Still Get Their Cut
One of the main reasons that the early Bitcoin adopters don’t like the idea of PayPal integrating Bitcoin into their platform is that they don’t want PayPal to add on all of the extra fees to the Bitcoin network. One of the main features of Bitcoin is supposed to be its relatively low fee structure, and various forms of centralization on top of the Bitcoin blockchain could eventually add extra costs to the payment protocol over time.
In addition to extra fees, there is also a fear from early adopters that increased centralization on top of Bitcoin will eventually lead to the same kinds of problems that we face today when it comes to banking, finance, and payments. After all, the main point of Bitcoin is that it is a censorship resistant form of money that is not open to any counterparty risk. When you start storing your bitcoins with centralized institutions such as PayPal, or even Coinbase, you start to move away from the whole reason Bitcoin was created by Satoshi Nakamoto in the first place.