The SatoshiLabs team doubts PayPal will enter the crypto market to promote it with good intentions.
Even if the majority of the crypto industry was happy that PayPal’s announcement that it would incorporate cryptocurrencies into its own payment service catapulted Bitcoin to $ 13,200, there are nonetheless critical voices
A blog entry from October 21st, written by Satoshi Labs, the team behind the Trezor crypto wallet, warns that PayPal is „probably not adding Bitcoin Lifestyle to its range of services to promote the development (of the cryptocurrency)“. The criticism expressed relates primarily to the well-known argument of inveterate crypto investors who believe that the custody of crypto funds in a centralized organization, in this case PayPal, contradicts the basic idea of decentralized cryptocurrencies.
„If millions of newbies come to Bitcoin via PayPal, there will be a very large information gap that endangers both their user experience and the basic idea of cryptocurrencies,“ as SatoshiLabs writes accordingly. And further: “Nobody should perceive money that is entirely with a third party as their own property. Crypto exchanges have repeatedly lost users‘ money without being able to compensate them afterwards. “
The blog adds:
“In the long term, you have to see that if PayPal does not take the community into account and does not allow users to store their own keys, there is no added value for the industry. The greatest risk is that the company’s good reputation in the payments industry is also interpreted as expertise in the crypto sector. This could undermine the good advice that the community has developed in the long dialogue, as PayPal brings a lot of ill-informed people into the market. “
Many crypto experts advise against holding crypto funds on centralized crypto exchanges as these are prone to hacks, security holes, bugs or other errors that can have devastating effects. Even Coinbase, the largest crypto exchange in the USA, has crashed repeatedly when the crypto markets showed high volatility. Currently, the Malta-based crypto exchange OKEx has temporarily restricted all crypto payouts for security reasons , to name another example.
As Blockchain.com CEO Peter Smith says, PayPal’s offering would also be „highly decentralized and not very flexible“:
“We saw it at Robinhood and we’re seeing it again now. Cryptocurrencies are about financial freedom. They are modern money that no one can control. Even if we are happy that a new audience gets access to it, this approach restricts true self-custody and thus the freedom of transaction. „