One of Bitcoin’s biggest proponents is not a fan of PayPal’s supposed Bitcoin service.
Antonopoulos recently released a YouTube video titled ‘Cargo Class Bitcoin with PayPal [PayPal Bitcoin isn’t Bitcoin].’ Antonopolous describes in detail the potential problems PayPal faces with its service such as, “trying to chase the price of Bitcoin to the point where that renders them bankrupt.”
Indeed, he says that buying Bitcoin on PayPal doesn’t count as actually owning it:
“If you buy your Bitcoin on PayPal you didn’t buy Bitcoin. What you bought is exposure to the price of Bitcoin mediated by a custodian who you hope is doing good risk management practices but who you cannot audit for the actual existence of reserves.”
Not Your Keys, Not Your Coins
Antonopoulos is a vocal advocate of self-sovereignty. He frequently speaks about personally accepting Bitcoin as payment for goods and services.
Some would argue that it’s obvious why PayPal’s iteration of a cryptocurrency trading platform particularly irks the crypto Twitter influencer.
PayPal Enters the Blockchain World
Like many other large financial services firms, PayPal has decided to integrate crypto into its platform.
Last month, PayPal temporarily removed the waitlist imposed on American users and allowed them to start trading multiple crypto’s.
With almost 300 million global customers, this is major news in the cryptocurrency space, but as Antonopoulos puts it, it’s still not really “owning” Bitcoin.
Digital asset managers like Grayscale provide their customers with price exposure without owning the underlying cryptocurrency.
Grayscale owns Bitcoin on behalf of its customers, and it appears that Antonopoulos sees PayPal operating with a similar thesis. In both cases, users can’t withdraw cryptocurrencies to other wallets.
In his YouTube video, Antonopoulos states that this type of system creates “second class citizens of the Bitcoin system.”
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