Cryptocurrency Comes Out of the Shadows

PayPal provides Access for the Masses

Cryptocurrency ownership was once the domain of the ultra-wealthy or patrons who wanted anonymity to prevent tracing of illegal activity – or didn’t want others to know what they were purchasing.

Not so much anymore, at least not if recent moves by one of the world’s leading electronic payment companies go according to plan. Cryptocurrency is hitting the financial mainstream in 2021 as PayPal moves forward with steps to add the online-based coins to its payment options.

Not only is PayPal facilitating the buying and selling of several cryptocurrencies, according to its press releases, but the company is shepherding the inclusion of cryptocurrency into everyday retail transactions by creating an option for its more than 350 million users and 26 million vendors to use and accept as payment for purchase of goods and services.

“With over 300 million active users worldwide, this could become a pivotal turning point for an industry that has been previously described as “niche,” “complicated,” and “inaccessible,” said the “Insider Monkey” in an article posted on Yahoo Finance, concluding that the move is, “allowing anybody from PayPal’s diverse userbase demographic to gain exposure to the cryptocurrency boom.”

In other words, it sets the stage for a revolution in how the “not so wealthy” might access cryptocurrency in the future. Being able to purchase cryptocurrency via PayPal significantly increases the convenience factor. Recent moves by cryptocurrency brokers to offer fractional shares of the online currency are beginning to remove the financial obstacles – namely the high price – to being a cryptocurrency owner.

However, pricing for a whole coin remains an obstacle for the average investor.

Prices for one bitcoin hovered around $12,000 during the summer of 2020. When the PayPal announcement broke in late fall, the price jumped to $13,200 per coin the following day. By mid-January 2021, the price soared to $40,000; and at the time of this publication one bitcoin was valued at $48,390.

In its announcement, PayPal said it would initially support four types of cryptocurrency: Bitcoin, Bitcoin Cash, Etherium, and Litecoin.

Satoshi WrightBitcoin is perhaps the most familiar to Americans. It was created in 2009 by an individual or group of persons using the name Satoshi Nakamoto. It was the first of the cryptocurrencies and it uses a peer-to-peer platform to receive and send payments between users, thus, bypassing the additional fees of banks or other brokers.

Bitcoin Cash evolved from Bitcoin. It is fairly the same concept but differs in that its maximum block size online is 32 MB and Bitcoin is still limited to 2 MB.

Ethereum began in 2015 after Vitalik Buterin, a Russian-Canadian and co-founder of Bitcoin Magazine, became frustrated when changes he suggested to Bitcoin were not acted upon. Three years prior, his father had given him some Bitcoin. Buterin was fascinated. He wrote a white paper describing what he wanted to create: a "decentralized mining network and software development platform rolled into one" that “facilitates the creation of new cryptocurrencies and programs that share a single blockchain (a cryptographic transaction ledger),” instead of the numerous blockchains required by Bitcoin. On March,1 2021, one ether was valued at $1,519.98. It differs from Bitcoin in that it is a platform upon which users can build their own contracts. Technically, it is classified as an “altcoin” because it has different features than does Bitcoin.

Litecoin in comparison is more accessible to a wider group of investors with its March starting price of $171.21 for one coin. It is often likened to the relationship between silver and gold with Litecoin being the silver and Bitcoin being the gold. Litecoin’s processing speed is much faster than Bitcoin. What takes Bitcoin ten minutes to process, Litecoin does in 2.5 minutes. It is a split from Bitcoin, or what the industry calls a “fork.” Litecoin is dubbed such as it is intended for smaller value transactions. It also is an “altcoin.”

One caveat for purchasing Litecoin via PayPal: according to PayPal’s guide to Litecoin, users must first purchase Bitcoin and then exchange it for Litecoin.

The ability to purchase, sell, and use cryptocurrency on PayPal will be limited to the United States at first, company representatives said in recent press releases. Cryptocurrency used to make purchases on PayPal will be exchanged into dollars by PayPal for merchants. As the platform expands the use of cryptocurrency to other countries, a similar process will occur with each nation’s currency.

There are more than 700 different types of cryptocurrency available. The four currencies referenced above are currently the most popular, and while PayPal intends to begin integrating them into its expansive online purchasing platform, company officials did tell “Review Geek,” a website for techies, that it intends to expand its support of other cryptocurrencies.

PayPal has put itself in a position of commanding the use of cryptocurrency for the masses, no longer will crypto just be found in the electronic wallets of the ultra-wealthy.

“With PayPal accepting payments in cryptocurrency and paying out conventional money, not to mention its position as one of the most widely accepted forms of payment on the planet, the company could quickly become one of the most powerful players in the still-volatile cryptocurrency market,’ concluded “Review Geek” writer Michael Crider.

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