PayPal Bitcoin Isn’t Bitcoin – Andreas Antonopoulos

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In Brief
  • Bitcoin thought-leader Andreas Antonopoulos doesn't believe buying Bitcoin through PayPal counts as owning it.

  • Antonopoulos explains that PayPal users can only buy price exposure and not the underlying asset.

  • PayPal recently enabled cryptocurrency trading to all of its American users.

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The Trust Project is an international consortium of news organizations building standards of transparency.

One of Bitcoin’s biggest proponents is not a fan of PayPal’s supposed Bitcoin service.





“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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Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.

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