Is Bitcoin Too Big a Competitor?
The online payments company says that bitcoin probably isn’t the future of payments. However, it’s now pursuing blockchain solutions and various cryptocurrency-based projects.
One of the big questions is, “Why go through all this if you’re just going to knock bitcoin to the side?” The answer is simple… Bitcoin is not only a huge competitor, but offers many advantages that PayPal does not, starting with its fees.
Interestingly, complaints have accumulated over the past two years even from dark web users that bitcoin transactions have become too expensive. This is exactly why they’ve moved onto other cryptocurrencies such as Monero. The coin allegedly boasts smaller fees and quasi-anonymous properties that these individuals can take advantage of.
However, bitcoin’s fees are still nothing compared to PayPal’s, which can charge nearly five percent on most goods and services-based transactions. That means for every $100 you earn, you can expect to lose nearly five dollars based on what the money is for and what transaction division it falls into.
Nevertheless, it appears John Rainey – PayPal’s chief financial officer – does consider blockchain technology to be quite revolutionary. He comments that the company “doesn’t want to miss out,” and thus is still pursuing crypto and blockchain strategies where appropriate. He states:
We have teams clearly working on blockchain and cryptocurrency as well, and we want to take part in that in whatever form that takes in the future. I just think it’s a little early on right now [for bitcoin].
These words are also interesting in the sense that bitcoin, as it stands at press time, is the market’s most dominant coin, and is currently trading on most exchanges for over $5,800. This marks a near 25 percent rise in price in just a little over a month for the father of cryptocurrency, making it a much more competitive coin.
Nevertheless, PayPal remains a bit skeptical, with the company’s CEO Dan Schulman recently commenting:
We’re not seeing that many retailers at all accept any of the cryptocurrencies.
Bitcoin Is Growing in Other Ways
That may be true. After all, bitcoin remains relatively vulnerable to price swings and volatility, but we are seeing a stronger presence of institutional players in the crypto mix, so perhaps bitcoin’s benefits are becoming more noticeable than ever before. Schulman has also commented that blockchain technology is “interesting.”
To be fair to PayPal, this seems to be the same kind of attitude that several one-time haters have held. For example, JPMorgan Chase’s boss Jamie Dimon has consistently criticized bitcoin in the past, calling it a “fraud” that was “worse than tulips.” Now, the company is releasing its own unit of crypto known as JPM Coin. What does that tell you? In the end, these companies realize that crypto is becoming bigger than ever and must give in to some degree.