Bitcoin Forum

This is really interesting. PayPal CEO Dan Schulman disses BTCitcoin for price fluctuation and claims it can't be used as a currency for businesses due to the fact of needing to be converted to fiat after the sale (which takes a fee to convert, thus losing your margin). He also argues that the extreme price fluctuations of 10%+/- can be a hindrance for businesses to accept BTC.

Here's the article

https://www.ccn.com/bitcoin-could-disrupt-paypal-visa-analyst

Here's the interview

https://youtu.be/Z4gah7TROuM


He obviously doesn't realize there is an ever growing list of large name companies that accept BTC as payment!

https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/

What do you think?

The main disadvantage of bitcoin is volatility that is why big companies refuse to implement cryptocurrencies to their payment gateway. IMO  5 years later we can discuss this idea about stabilizing the price of volatile cryptocurrencies.

I doubt he actually fears Bitcoin since he came with these arguments on why bitcoin is not a good currency to be used by businesses. They know bitcoin will be something big in the future but I'm sure they trust their services and have a large base of clients and contractors to sustain their lives until bitcoin is going to take control over payments system.

every time i hear another FUD story by some big company, or bank,... i become more confident in bitcoin  because that only proves that bitcoin has been growing strongly to the point that it has successfully struck fear in the hearts of those that it can easily replace. and PayPal with all its flaws and the fraud that it enables is going to be the first thing that bitcoin is already replacing so it is understandable for their CEO to be afraid like this.

There is truth in the claim of price volatility scaring away certain merchants, but I believe as the industry matures mechanisms will be in place for quick conversion to fiat so that merchants are not hit with the risks. Also, given that this criticism is coming from a centralized entity with a reputation of high fees, we should be skeptical of these comments.

Lol, his predecessor (Bill Harris) is worst though,

https://www.cnbc.com/2018/04/26/fmr-paypal-ceo-says-investors-are-drinking-the-bitcoin-kool-aid.html

https://www.newsbtc.com/2018/08/15/is-bitcoin-a-cult-a-former-paypal-ceo-seems-to-think-so/

https://www.investopedia.com/news/former-paypal-ceo-calls-bitcoin-scam/

So I'm not surprised by Dan's statement because they know that bitcoin is out there taking a big slice on their profit earnings that's why they continue to attack it in the media.

there is no truth to that actually.
you can easily verify this by looking at the growth of the number of merchants that have started accepting bitcoin over the past years and also the total amount of bitcoin that has changed hand among merchants and customers during that time. you can clearly see that there has been a big growth in both which shows that it is not "scaring anybody away" it is just happening slowly because bitcoin adoption is happening slowly.

I mean, what do you expect from a competitor? They have the financial incentive to trash on their competitors regardless if it's a direct competitor or not. It's the same as Peter Schiff trashing on bitcoin because he has a gold selling business.

About the price fluctuations, well, bitcoin is a 10 year old asset. Of course it's going to be volatile. It doesn't take a genius to understand that.

Dan old man, you are obviously missing the whole point of Bitcoin and how it will evolve into a true currency in the future. Bitcoin started out with only a few people buying loads of coins and this led to a situation where you have a uneven distribution of coins. <Whales with the power to manipulate the price>

As Bitcoin matures and gets distributed more evenly, the volatility issue will resolve it self. Once Bitcoin adoption grow enough, people will not have to convert to fiat currencies, because they can pay directly with bitcoins at merchants.  ;)

Currently, the smallest unit of bitcoin is Satoshi based on bitcoin currency recorded on the blockchain. Satoshi is one hundred millionth of a single bitcoin (0.00000001 BTC). so applying the smallest unit to measure it rear can't feel the change of price for 1 Satoshi as if the fluctuation in BTC price.
The transfer fee also can be very low. one Chinese person tries successfully one experiment only paying 1 Satoshi to transfer bitcoin.
I believe that Bitcoin, as current fiat currency, will become a popular currency with high liquidity in the future.

He is kinda right about the price fluctuation,but this is something that can be solved.
The btc price patterns will become more and more stable and  the bullish/bearish trends will last longer,just like the recent bearish trend.He is right about the fiat conversion,though. :(

It is normal that PayPal and Banks not to be big fans of crypto, as sooner or later they will be bypassed when crypto adoption rate will be sufficiently high.

Till then, expect a lot of FUD from their side 😊

No wonder XAPO can make so much money. The founder himself is a big man.

Sounds JP Morgan to me that after his series of criticizing Bitcoin investment before because in fear of losing his banking businesses but what comes next was he become one of the known supporter of Bitcoin until today. There is no reason for him to fear Bitcoin as still we can use PAYPAL after converting our Bitcoin assets to fiat.

Well of course he's going to publicly denounce Bitcoin, I mean Bitcoin has just surpassed Paypal in terms of yearly transaction volume.
Source: https://www.newsbtc.com/2019/02/26/bitcoin-surpasses-paypal-in-yearly-transaction-volume-at-1-3-trillion/

Then there's this, an ex Paypal COO has had some very positive things to say about Bitcoin recently.
Also participating in the Lightning Torch Bitcoin transaction relay.

If I were Paypal's CEO, I'd be worried too.

Source: https://cointelegraph.com/news/ex-paypal-coo-hails-bitcoin-acceleration-as-he-joins-lightning-torch-relay

Last year i needed to use paypal and like 3-4 years ago i did some purchase for 20 Euros with paypal . So the story is , i sold item for 300 euros and got payment in paypal . Did try to withdraw to my bank account , got no sucess . It did show failed . Did contact customer support on e-mail , got response next day with counter question lol . Then i decided to call customer services . Did speak with them for like 10 min to explain me why i can't withdraw , they told something about suspicious acitivity on my account and to wait for few hours . Next day nothing happens . So after 4-5 or even more days my withdraw went tru . After this situation i no longer try to use paypal , atleast trying to avoid it . Maybe the problem was because of my paypal innactivity for few years , not sure , but 4-5 days to withdraw my money and then 1-3 working days to wait for it to reach my bank account is sad....

He is not afraid of anything and just tells it like it is.At the moment, no serious business really wants to use Bitcoin as a payment due to its volatility.I would not be surprised if in time the Paypal payment system itself starts using cryptocurrency as an additional service. Time will tell.

He's...not wrong. Rapid fluctuations are a pain. It's often said that volatility must be addressed for Bitcoin to mature. Some might deny this, but if they're the same people who don't want to spend coins because they're waiting for the price to go up, then they probably have to take a good look at themselves lol.

Bitcoin is in some ways unsuitable as a currency now, but I believe it won't be long until these competitors start shaking in their boots. They can talk trash in the meantime.

Of course, they're going to attack Bitcoin here, it's competitor for them. You just have to look at 2017 at how Paypal, Visa and Mastercard put a lot of spin on Bitcoin's disruptive effect in the financials of any country so I'm not surprised by this statement coming from Dan himself. They're been threaten ever since people uses Bitcoin as money or mode of payment and I'm sure it put a big dent on their quarterly earnings. So they need a continuous media tirade against the whole crypto so that they can stay on their private payment systems. Let them do the talking, people in time will eventually chooses cryptos.

It is a competition.
Let us thank him though for mentioning bitcoin in all of his  interview. Yes, make it known by others in  their own mouth.

Take down what is going to get large someday while it is early. It is a good strategy but will never work.
Let us wait for a new crypto currency being released someday.
PPC = PayPal Coin. ;D

Why do you need to switch to FIAT if it accepted as a currency then all will be traded with Bitcoin. I agree that Bitcoin is too volatile for a short time and it is not as stable as stable coin so it will not be able to replace FIAT.

i am more interested to know when PayPal dudes are going to be desperate enough to start their own altcoin. it certainly has started like this before many times. the latest example was Jpmorgan crapcoin. they also attacked bitcoin a lot before they made their own altcoin. what would it be this time? peepee coin? :D

Well he was not wrong about the price fluctuation but most payment processor would find a way to lessen the effect of that. If it would bankrupt them, they wouldn't offer the service in the first place.

Note that I'm referring to services that accept the bitcoin and pays whatever utility one has to pay in fiat. These companies even offer discounts and rebates if you use their services. They wouldn't if they were struggling with the volatility.

Lol, this isn't surprising.  Paypal stands to lose a business if crypto becomes the preferred payment method.  This is just like Warren Buffet calling bitcoin rat poison when he holds la large percentage of banks and credit card companies.  These guys will criticize anything that threatens their bottom line.

Of course he is going to diss bitcoin. Crypto currencies is going be a huge competition for him. Do you really think he will put on full support for it? At best he can do is integrate crypto currencies to his current system. But yeah, then again there are these legal issues and risks associated with it. Though i won't deny, from his point of view he is correct. The conversion fee and all those hassle is actually going to be an issue. But, that problem will be for the people who will be converting it to fiat.

Fuck PayPal, who uses it nowadays?
Bitcoin surpassed PayPal in terms of total yearly transaction volume at $1.3 trillion.
More info here - https://www.newsbtc.com/2019/02/26/bitcoin-surpasses-paypal-in-yearly-transaction-volume-at-1-3-trillion/

That's the main reason that scared PayPal and all its employees as well as CEO himself that he couldn't resist himself from showing up and responding under the effect of jealousy. I don't really count anyone to anything if they belong to PayPal, I personally hate them for all their shady holds, especially their 21 day hold and account freezing.

Well Bitcoin is competition to money transferring services like Western Union and Paypal just as much as it's competition to banks so of course you are going to hear some criticisms. He was not entirely wrong however, the crypto do have high fluctuation.

Most merchants seem to be unfazed though. Even in my country the range of payment options using online wallets are expanding. These obviously converts to fiat at one point but that they can keep the business going means there's money to be made.

I agree with Schulman that volatility is an obstacle on the way to mass adoption. Retailers don't want to risk their profits so much, it's reasonable. Some do go for btc, though, but I am pretty sure they just convert btc into fiat on regular basis, and that's not how adoption should work.
That is also true. Paypal is nothing special, and in my country it's not even that popular, because people can send their money here via Paypal, but not receive it. I agree with the  analyst that in the long run such services might want to be more crypto-friendly is they want to survive. Elong Musk is one of the founders of Paypal and he respects Bitcoin. Maybe he'll put some sense into the CEO's head  ;D

every day the bitcoin market looks more similar to 2015 bitcoin market. and each of the news like this one here makes me think there is more similarity and the same situation is about to be repeated soon.
we had the same scenarios too, people being scared of bitcoin future, price not rising and staying stable, some speaking of ridiculous drops to imaginary lows, and the news spreading lots of FUD about bitcoin...

you all know how it ended ;)

They have to dismiss the use of bitcoin because it will hurt their business so much and they will come out with things like these, majority of the payment platform will be affected if people start using bitcoin for international business transactions, we will see a mass adoption in the future until then they can spread FUD like these to protect their businesses.

This must be the reason why he got angry at Bitcoin for stealing their clients. Ex paypal coo must be the EX for that reason. Maybe he finally was able to share his positive attitude when he was kicked out of the company. Maybe they have policies that forbid praising cryptos?

Paypal is losing this battle. I'm sure CEO sees the numbers and knows where this is heading. It's not the fault of Bitcoin. It's the fault of Paypal's high fees.

It's laughable when someone from Paypal talks about high fees! Paypal is well known for their exorbitant conversion fees so people will be less worried about margin if they use cryptos instead of paypal.

But I understand Dan's pain. Unlike Banks, PayPal's revenue is mostly dependent on the remittance business where they take fees for receiving money, converting money to local currency and to transfer money to our bank accounts. So cryptos are directly impacting their business. A lot of people like me stopped using paypal after inception of bitcoin. I had a bank verified paypal account which was pretty active. However, I recorded zero transactions in last 3 years after I adopted bitcoin for my freelancing payment. So paypal can he considered as the most badly affected company due to adoption of cryptos.


I completely agree with this statement. 10% fluctuation in any direction is indeed huge and that is actually discouraging a lot of business owners to use bitcoin. Even though there are other reasons like non existent government regulation and confusing tax structure, but the fluctuation is also a big challenge.

I am sure there are lot if businesses accepting bitcoin, but it is particularly challenging for price intensive sectors where the competition is high.

This has been said years back by Peter Thiel who is the founder of PAYPAL. He states this to be the best solution for cross border transactions. To the same he added stating if he had known about the blockchain technology prior to the development of PAYPAL he could've used the same on PAYPAL. Now CEO of PayPal coming with such a news adds value to bitcoin.

Yes!
Everyone should start getting used to this kind of words. We've been attacked since before and look on where they are, this is another big company just think on how it went after Jamie Dimon was bashing bitcoin before.

Of course they see bitcoin as a threat so it's not something surprising that they will throw shades about bitcoin. Though he still has a point. I mean bitcoin has its own pros and cons, and when you attack the other party, of course you'll tell its cons. It just matters how you view bitcoin yourselves.

We can't deny that volatility in the cryptocurrency markets is still a controversy for now. In one side some traders utilize the benefit of volatility to make a significant amount of profit. In another hand business owner won't use Bitcoin as the way of payment because of the volatility.

IMO, both aren't likely a good side but the second option more likely are more desired since the more Bitcoin accepted in the merchant, that will mean the adoption increase, and if the adoption increases the volatility will decrease.

Well, not only the high fees, it's also that you're just not in control of your own money.
Paypal can just lock your account for as long as they want, under the guise of 'fraud investigation'.

Imagine having a business and having your Paypal account frozen for X amount of weeks.
Yes, they have done this to many people and businesses, sometimes for pretty obscure reasons.

Paypal should not only fear cryptocurrency because the use of digital money has been widely used by the banks. The bank to bank transfer make this possible. If you were to think how those individuals will able to do successfully huge transactions is because of this banks. So paypal were just too assuming to react on the rise of cryptocurrency without seeing the real danger of their business behind with the banks nowadays. 

But there's an inescapable counter-balance to price volatility; it attracts traders. Which consequently increases market liquidity. Which attracts investors... which causes price volatility. So as you said, Bitcoin is more attractive as an investment asset than a medium of exchange for the majority of users, but only until the market matures.

But that's not stopping trade using Bitcoin; there's no reason not to sell as much of your regular fiat income as you can for BTC, then buy as much of your regular purchases using bitcoin. That supports the bitcoin economy, supports market liquidity, and proves these kind of claims from bitcoin's competitors wrong.

Paypal is one of the things that becomes obsolete with Bitcoin. Like banks, unless Paypal also becomes an exchange or payment processor (ie. deposit bitcoin pay fiat), people will simply stop using it. The main problem with Paypal is that depends on credit cards. Why? We should be able to move our funds from/to bitcoin.

But that is ok. The whole sector either embraces Bitcoin or will start getting kicked to the sides. Why he doesn't ask one of the actual creators of Paypal, you know, Elon Musk? That should give him a hint...

I agree with you that merchant adoption is growing, especially with the Lightning Network, but that does not contradict what I wrote. Bitcoin's volatility is a concern for some merchants, and insofar as it is, it will play a role in bitcoin's rate of adoption. However, I believe over time the bitcoin price will stabilize.

He might be right to some extent, but we can't deny the fact that with the necessary enabling environment by the government, much fund will flow into this market, which will guarantee low volatility unlike what we are seeing now, wherein when just $10b is taken of the crypto market, bitcoin feels the offload. In the future, if bitcoin price becomes relatively stable overtime, there will be no need to converting to fiat. If large population uses bitcoin, fiat will be dished.

If you are sending a million dollars for business purposes what is total amount you have to shell out with other payment solutions and if you compare that with the transaction fees of bitcoin it is just like a drop in the ocean. They can diss what ever they want but eventually people who does international transaction will understand the value of bitcoin and how much they can save in transactions alone.

Well, he isn't completely wrong. Using Bitcoin in business is still very complicated and risky and often tied with many difficulties so I would not say that he is afraid of Bitcoin because of competition but he is quite realistic. Especialy in some countries is hard to use Bitcoins for business because of very strict laws and regulations oposed by government and tax authorities and it's true that at the end you need fiat money. But I hope this will change in the future.

I doubt PayPal fears Bitcoin at all, just like Warren Buffet, people just don't get it. Bitcoin isn't even trying to compete against centralized payment systems, it's a whole different ball bame, when they realize Bitcoin is digital gold it will be too late, everyone that got it will be rich.

If Bitcoin can compete against PayPal in the form of Lightning Network in the future that is just a nice extra, however is not the main point of Bitcoin. This is how things are. And gold is 7.8 trillion, most payment processors are nothing compared to the potential market for Bitcoin. I mean how can't people see Bitcoin is still tiny and it doesn't fucking matter if you get in at $3000 or $300? it's nuts. When we are at $100k well see the first regret suicides.

He's actually not wrong about a lot of businesses accepting bitcoin and quickly converting it into fiat - because bitcoin is after all admittedly volatile, and businesses, apart from a few actual bitcoin enthusiasts, do not want to carry that exchange rate risk by accepting bitcoin is itself instead of going through a third party like Bitpay.

To be honest, this is a concern, but in the future as adoption increases, price stability will come as well. These things go hand in hand and we're already seeing prices being a lot more stable as markets matured from year to year. And it certainly doesn't warrant this level of criticism, as adoption has certainly been on the increase as you say.

I'd be interested to know what his stance on other, non-decentralised, government or privately issued blockchain projects are. He seems to be solely talking about decentralised cryptocurrencies in this segment, which is not surprising given that Paypal I believe has lost at least a fraction of their market share in online payment processing given the emerging popularity of bitcoin in online trades. There is a conflict of interest that doesn't allow him to comment unbiasedly here.