Throughout the last year, the cryptocurrency industry has started to win the trust of the masses. Unlike before, ordinary people are researching and showing huge interest in joining the crypto community. This comes as no surprise, considering the price growth and utility of most cryptocurrencies. Yet, investing in cryptocurrencies is not as hard as people think, especially in the year we are living.
Today, you can buy cryptocurrencies without leaving the comfort of your own home. This can be done by using a debit/credit card or by using a Paypal account.
Throughout this article, we will do our best to give a detailed guide on how to purchase cryptocurrencies with Paypal. But first, we will give a brief explanation of what cryptocurrencies and Paypal are as individual entities.
What are Cryptocurrencies?
Cryptocurrencies are digital currencies that are secured by blockchain technology. This trait makes them virtually impossible to be double-spent or counterfeited. Simply put, cryptocurrencies are extremely secure currencies that are stored virtually. The main goal of cryptocurrencies is to be used for many types of payments, from merchant payments to larger payments. This would make transactions faster, cheaper, and safer.
Initially, cryptocurrencies were built on blockchain technology, a type of Distributed Ledger Technology (DTL). This gave cryptocurrencies a decentralized origin since a DLT is – put in the simplest form possible – a protocol that is used to secure a digital database by keeping it decentralized. Being decentralized meant that there would be no central authority, making blockchain-powered networks completely community-driven. However, as years passed, new types of chains began being used – Holochain of Holo, the Hedera Hashgraph Chain, and many other chains.
The first public appearance of blockchain technology was back in 1991 when two researchers, Stuart Haber and W. Scott Stornetta, outlined a system in which the data would have timestamps that could not be altered. Back then, however, they lacked the technology to build something major out of this idea. The blockchain as we know it today made its come back in 2008 when the Bitcoin whitepaper was published by the pseudonymous Satoshi Nakamoto. Throughout the last decade, Bitcoin, as well as the whole cryptocurrency industry, has grown tremendously. With more than 11,000 cryptocurrencies available for trade and a global market capitalization of more than $1.92 trillion, the industry has outperformed itself.
Back then, Bitcoin was seen as the only valuable cryptocurrency; however, today we have projects that have a broader vision regarding the blockchain space. The main one is Ethereum, a crypto project that has been revolutionary for the whole crypto space. The Etheruem network is the first one that was programmable, giving developers a space to experiment on. Some notable innovations on the Ethereum network are DApps and NFTs. This cryptocurrency has been the second-biggest cryptocurrency in the market for quite a while now, with Bitcoin being the first.
At the time of writing, Bitcoin and Ethereum have a combined market dominance of 62.6%, with Bitcoin accounting for 43.9% and Ethereum accounting for the remaining 18.7%.
If you want to know more about cryptocurrencies and their function here’s a detailed guide.
What is Paypal?
Payments began to be done online by 1994 when the Stanford Federal Credit Union introduced online payments to the public through their online payment system. Online payments were much needed back then, and today, they play a crucial role in the global economy.
Today, there are many online payment systems, but one stands out – and that is Paypal. Simply put, Paypal serves as an online payment system, being the biggest one as of right now. To pay with Paypal, all you need to do is use your Paypal email. This means that you don’t need to enter any of your debit/credit card info on various websites to use your funds. All is done by simply connecting your card to your Paypal account. Moreover, Paypal accepts all global currencies, and in late-2020, Paypal announced that they are going to accept cryptocurrencies as well.
Paypal and Cryptocurrencies
The first time Paypal mentioned cryptocurrencies was back in 2013. At that time, Paypal showed interest in this ever-growing industry. However, today, Paypal allows its U.S. users to buy, sell, hold, and trade various cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). This is done through the Paypal-owned mobile wallet, Venmo.
However, there is a small twist when it comes to investing in cryptocurrencies using Paypal, you don’t own your Bitcoin. Similar to centralized cryptocurrency exchanges, Paypal plays the role of central authority by managing the wallets. This is, of course, only valid if you store your Bitcoin in Paypal. This also means that you only own your public address, while Paypal controls your private keys.
When it comes to the Paypal Consumer Fees regarding crypto, they are relatively high when compared to some major cryptocurrency exchanges. However, these fees apply only when a cryptocurrency is bought or sold using Paypal. This means that holding your cryptocurrencies in Paypal is free – as it should be.
How to Buy Bitcoin with Paypal?
There are two ways to buy Bitcoin with Paypal. You can either buy Bitcoin directly from Paypal, or you can buy Bitcoin using Venmo – the Paypal-owned social payment app.
First off, to buy Bitcoin directly from Paypal simply follow the steps listed below:
Step 1: Create a Paypal account if you don’t have one
First off, you need to open a Paypal account. Using your personal information, including your email and phone number, you will be able to open a Paypal account in minutes.
Step 2: Locate the “Crypto” button
On the landing page, near the “Send” and “Request” buttons, you should be able to find the “Crypto” button. After successfully locating the button, simply tap it.
Step 3: Select Bitcoin
Select the cryptocurrency of your choice, in our case, we will use Bitcoin. Afterward, press “Buy” and select the amount of Bitcoin you are interested in.
Step 4: Choose your Payment Method
There are some options when it comes to payment methods. Yet, the main payment methods are, paying using a debit card or paying using a bank transfer. Since Paypal accepts debit cards, you can do this without the need to link a bank account with your Paypal account.
Step 5: Execute your Purchase
Now, all that’s left is for you to finalize your purchase. After finishing the steps we mentioned above, simply press the “Buy” button. When you do so, a confirmation screen will pop up and you should see some information regarding your order. Just press “Buy Now” and you are good to go.
Frequently Asked Questions (FAQ)
How to withdraw Bitcoin from Paypal?
Well, technically, you cannot withdraw Bitcoin from Paypal. Since you don’t actually own your Bitcoin when you buy it through Paypal, you are unable to withdraw it. The only way to move the Bitcoin you bought in Paypal is to sell it and use that money to buy Bitcoin using an exchange or any account that allows you to own your Bitcoin.
How to Buy Bitcoin using Venmo?
This is done easier than using Paypal. Firstly, you must create a Venmo account. Afterward, you must select Bitcoin and press “Buy”. Lastly, you must choose your payment method and execute your order.
How to send money from Paypal to Bitcoin wallet?
It depends on the exchange you are using. For example, in the U.S., you can fund your Coinbase account using Paypal only if that Paypal account you are using has a bank account or debit card linked to it. Another example is Binance and its Peer-to-Peer (P2P) trading. In P2P trading, you can deposit fiat currencies or even buy cryptocurrencies directly by using Paypal.
Also Read: What is Bitcoin? A Step-By-Step Guide
- Unlike before, investing in cryptocurrencies today is very easy. You can do so by using a debit/credit card or by using your Paypal account.
- Cryptocurrencies are digital currencies that are decentralized and are built on top of blockchain technology, making crypto transactions secure, fast, and cheap.
- Bitcoin was the first cryptocurrency network to do be introduced to the public, with Ethereum being the first programmable network.
- The first online payments began to be done in 1994 by Stanford Federal Credit Union. Today, Paypal is the leader of this industry, having more than 390 million active users.
- In late-2020, Paypal announced that they would slowly start to integrate cryptocurrencies, allowing merchant accounts to invest in Bitcoin and some other major cryptocurrencies using their platform.
- The fees that come with using Paypal for cryptocurrency purchases or sales are relatively high when compared to certain major exchanges.
- Purchasing Bitcoin through Paypal is very easy, therefore, it is a good way to invest if you have absolutely no idea of how to use a cryptocurrency exchange. However, since you don’t own your Bitcoin when you purchase it using Paypal, exchanges are way better for investing.