Recent reports state that PayPal customers shouldn’t use the platform to transact in BTC, as per industry experts SignKeys and Satoshi Labs.
While acknowledging that PayPal’s recent announcement on adding support for BTC and other cryptos may have led to a 15% appreciation of BTC, SignKeys sounded the alarm over users’ inability to access their private keys.
Furthermore, the company sees this as giving PayPal control over the users’ transactions and denying them the opportunity to transfer BTC P2P on the platform.
SignKeys holds that:
“PayPal does bring over 300+ million users; however, PayPal users won’t be able to access their own Private Key (The real asset owner), send/receive crypto to other PayPal users.”
Consequently, it considers the move as way to dictate how uesrs should conduct transactions.
PayPal Doubtful Intentions
On their part, Satoshi labs have called for a total boycott of BTC transactions on PayPal.
In a blog post appearing on its Trezor blog, the firm questions PayPal’s intentions in embracing BTC considering its previous reservations to adopting the cryptocurrency.
The post claims that PayPal’s foray into Bitcoin trading isn’t informed by the drive to attain mass adoption. Again it emphasizes PayPal’s anti-crypto stance recalling ex-CEO Bill Harris’ 2008 description of Bitcoin as “the greatest scam ever.” Satoshi questions this change of heart.
Sending mixed Signals
Satoshi Labs go further in highlighting the mixed signals PayPal’s statement sends. On one hand, the service is wholly custodial. But on the other, it undertakes to educate the account holders on the cryptocurrency ecosystem thereby increasing their grasp of its workings.
Satoshi argues the thinking that someone well versed in Bitcoin would give up their private keys suggests that the said educational content will disregard the fundamental rule of ‘not your keys; not your coins.’
Additionally, Satoshi Labs contends that PayPal’s signing up of millions to BTC will create an information gap countering the basics of cryptocurrency, hence exposing the users to risk.
Satoshi deems it impractical that one would not access the private keys to the cryptocurrency they buy on PayPal. It adds that nobody can claim ownership of the money in the custody of a third party.
Although critical of Paypal’s entry into the crypto world, the two firms acknowledge that this is a step towards realizing crypto adoption. It remains to be seen how PayPal will navigate the storm it has kicked up. The global payments leader announced its entry into the cryptocurrency market beginning in early 2021.