PayPal, Processor of $936 Billion in 2020, Allows Payment in BTC, ETH, LTC, BCH
Ethereum lacks the deflationary feature of Bitcoin, but its use cases grow by the day. With PayPal’s Checkout with Crypto unrolled, we should see a reshuffling of digital assets. In this context, it seems logical that those which serve as P2P cash the best will rise to the top.
Bitcoin Increases Value by 4.6x Since Last PayPal’s Boon
It seems so long ago when PayPal announced its Bitcoin integration, but it was only last October. Looking back, that announcement seems to have been the trigger that spurred Bitcoin’s prolonged bullrun. After all, Bitcoin gained 369% in value since, still relentlessly going up.
Today’s PayPal tweet represents a culmination of that integration. It links the biggest payment processor, with its 29 million online merchants, to not just Bitcoin, but three other cryptocurrencies as well.
But PayPal’s new checkout won’t merely feature Bitcoin (BTC)—along side it, you’ll also find Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). The seamlessness mentioned in the tweet is no small matter. It refers to merchants not receiving actual crypto funds, but fiat currency. This way, both parties—shoppers and merchants—can have the best of both worlds (in theory): shoppers using cryptocurrencies without inflicting their price volatility to merchants.
Although multiple alternatives have emerged since Elon Musk founded PayPal in 1999 (then X.com), it still remains the top global payment gateway with over 377 million users. In 2020 alone, PayPal processed over $936 billion worth of transactions, a sum now just slightly lower than Bitcoin’s market cap.
New Opening for Ethereum
Following the next step in PayPal’s integration, Bitcoin jumped by over $1k in price. This further fortifies the stance that you shouldn’t use your BTC on big expenditures, such as Tesla’s cars. Moreover, despite BTC tending to steal the public spotlight, ETH is likely to gain most from the latest financial entryway.
Keep in mind that Bitcoin as a digital gold is not as nearly disruptive to centralized finance as Ethereum. A true counterpart to centralized finance in the form of DeFi may not have existed without it. After all, Bank of America’s analyst, Francisco Blanch, seems convinced of this, as outlined in his research report published on March 17.
“DeFi is, we think, the most fundamental challenge to modern finance that we’ve encountered,”
“Ethereum basically allows you to program anything, but usually its most talked-about feature is ‘smart contracts’, which can solve a wide range of issues,”
With both the NFT mania in full swing, accompanied by Ethereum’s ground-breaking upgrade, ETH is positioned to become the go-to practical cryptocurrency in daily use. With the door to instant PayPal payments now fully opened, it’s difficult to imagine anything stopping it.
Litecoin – Faster and More Eco-Friendly Alternative?
As its namesake implies, Litecoin was envisioned as a lighter version of Bitcoin. One that is less energy-intensive and has a faster transaction speed. True to Charlie Lee’s vision, on average, LTC is about 3.6x faster than BTC.
Likewise, its proof-of-work algorithm is not as complex as BTC’s, allowing for its network and miners to use less electricity. However, if Litecoin were to match Bitcoin’s large network, it is not quite clear how significant the difference would be. With that said, keep in mind that attacks on Bitcoin for its carbon footprint don’t hold much weight.
In the meantime, Litecoin (LTC) makes for an excellent alternative for interfacing with online merchants due to its superior transaction speed. Although it has a larger supply of 84 million coins, its hard cap also makes it a deflationary cryptocurrency.
Bitcoin Cash vs. Bitcoin
The fourth crypto that you can now spend in the PayPal ecosystem is Bitcoin Cash (BCH) – Bitcoin’s hard fork made in 2017 due to scalability concerns. If you recall, Satoshi Nakamoto titled his whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System, not Bitcoin: Digital Gold. This is why the teams split and made the fork in the form of BCH so that it can serve its original purpose – a borderless P2P payment system.
As a result, BCH’s block size had undergone multiple increases, going from 1MB to 32MB, leaving BTC in the dust with its continued 1MB block size. Theoretically, this makes BCH much faster, but there is one big problem. Bitcoin Cash is not widely in use, resulting in its network featuring much less hashing power.
In turn, this makes BCH vulnerable to the double-spend attack. To counter that, many exchanges have implemented a very high number of transaction confirmations (usually 15, slightly lower than ETH). This ends up making BCH with one of the highest transaction times when it comes to popular cryptocurrencies.
Nonetheless, PayPal’s announcement may just be what it needs—increasing BCH’s usage which would expand its network’s hashing power.
How many types of altcoins do you tend to hold? Will PayPal’s announcement make you use them more? Let us know in the comments below.