When PayPal first rolled out “support” for cryptocurrency, it was a disappointment. Users could buy and sell crypto, but they could not use crypto, trade it, or send it to other users.
However, PayPal later introduced the ability to transfer crypto from a PayPal account to an actual crypto wallet. With this feature available, it’s time to seriously ask: should you use PayPal Crypto?
How does PayPal encryption work?
From the home page of your PayPal account, select Economy the tab. On a web browser, this is on the banner at the top of the screen. On the mobile interface, there is a dollar sign at the bottom.
From there you choose Crypto to buy, sell and learn about Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Click on the actual buttons to buy, or click on the articles on the right side of the page to learn more.
If you buy crypto through this interface, this page also shows the total balance of your portfolio, including how much you are up or down. Once you have a balance, you can also click the button for the coins you own to use PayPal to send crypto to other wallets.
Pros and Cons of Crypto on PayPal
When buying and selling was all you could do, PayPal Crypto was only for people who are curious about crypto or want to make money in the markets without setting up a real wallet. But now that you can use the crypto in a PayPal account, it is more suitable for a wider range of crypto users. But not all crypto users.
Benefits of using PayPal Crypto
Buying crypto on PayPal is easier and faster than using other exchanges, especially if you already use PayPal. If you regularly have money flowing into your PayPal account, converting some of that money into crypto is just a few clicks away.
Since PayPal Crypto originally started as an educational tool, there is no minimum account balance. Plus, the minimum amount you can buy, sell or send at a time is just $1.
Also, PayPal charges transaction fees for buying, selling and sending crypto. Still, these are quite competitive, which is good for people who want to transfer relatively small amounts or do so with relative frequency. PayPal also generates transaction history and reports better than other crypto platforms.
Disadvantages of Using PayPal Crypto
As mentioned, PayPal only supports four coins. They are pretty big, recognizable projects, but there are also some really big cryptocurrencies that PayPal doesn’t support. This is a disadvantage if you are interested in an unsupported coin, want to have a diverse portfolio, or want to use tokens one day.
After all, some people don’t just buy cryptocurrencies in hopes of getting rich. Some buy cryptocurrencies to use in decentralized apps. Unfortunately PayPal does not allow this. So if you actually want to use your cryptocurrencies as cryptocurrencies, you need to move them from a PayPal account to a crypto wallet like MetaMask.
While PayPal Crypto now gives you a wallet address, it still doesn’t give you your private keys. For many crypto advocates, this means that you don’t actually “own” the coins in your PayPal account. Because PayPal has your keys, they can lock you out of your account, get rid of your coins in case they choose to drop crypto support, etc. As they say in crypto, “Not your keys, not your coins.”
Is PayPal Crypto Right for You?
Now that we understand how PayPal Crypto works and doesn’t work, let’s look at some of the users most likely to benefit from it.
PayPal Crypto may be right for you if you:
- Already using PayPal and interested in Crypto,
- Looking to get into crypto but haven’t created any other wallet accounts yet,
- Want to make money from crypto but don’t use decentralized or Web3 apps and services,
- Likes to pull value in and out of markets quickly and often.
PayPal Crypto may not be right for you if you:
- Do not use/trust PayPal,
- Want to spend cryptocurrency on decentralized or Web3 apps and services,
- Want to buy cryptocurrencies other than the four that PayPal Crypto supports,
- Like to HODL your own cryptocurrencies on technology like hard wallets.
PayPal Crypto can be a good addition to your crypto kit
Even if PayPal Crypto is “not for you”, it can be a good addition to a more nuanced and dynamic crypto strategy. You can use PayPal Crypto to buy in crypto easily and then send it to a dedicated crypto wallet that allows you to do things like stake tokens or move coins to cold storage.
If you could only have one wallet, it might not be this one. But there’s no reason you can’t have two.
