[2018-02-22] PayPal CFO: Bitcoin`s Success is Very Likely

[Terraformer]

There’s a lot of doubt surrounding Bitcoin’s potential as a viable, real-world currency – but PayPal’s chief financial officer sees only positive things in the dominant cryptocurrency’s future.

A `Very High Likelihood` of Success

According to John Rainey, PayPal’s chief financial officer, Bitcoin, and other cryptocurrencies will one day become a popular method of payment – just not yet. Rainey told The Wall Street Journal:

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

Nevertheless, Rainey recognizes Bitcoin as a legitimate currency, even if it’s not quite ready for mainstream adoption yet. Says Rainey:

`At some point there is very high likelihood. The technology, there is real merit to it. I do think, though, it will be years down the road before we see the kind of ubiquity and acceptance that make it a form of currency that is used every day.`

This is not the first time PayPal has shown support for Bitcoin and cryptocurrency. PayPal was one of the first companies to accept cryptocurrency as a currency on its platform, allowing merchants the option to be paid in Bitcoin as early as 2014/2015.

Earlier this year, PayPal CEO Dan Schulman called Bitcoin “an interesting experiment” in a Facebook Live event, while also noting that “it could change the world.” At the same time, Xapo CEO Wences Casares even went so far as to predict a future in which one single Bitcoin could be worth $1 million.

Differing Opinions

Of course, not everyone agrees with Rainey’s and Schulman’s optimistic long-term assessment of Bitcoin’s future as a currency. Earlier this week, Bank of England Governor Mark Carney claimed Bitcoin has already failed on virtually every front, stating:

`It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.`

Venture capitalist and Tezos investor Tim Draper, however, recently claimed Bitcoin is “the future” of currency while claiming a large portion of the world’s currency will someday be comprised of cryptocurrencies.

http://bitcoinist.com/trends-regulation-crypto-industry-discussed-blockchain-bitcoin-conference-germany-april-4/

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[Kakmakr]

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

This is a very narrow minded approach to this problem and not something that cannot be managed. I know several merchants are using Payment processors to manage that risk on their behalf. These Payment processors even offer them the opportunity to hoard some of the bitcoins they received. <The merchant can stipulate what percentage should be hoarded and what percentage should be converted to fiat>

Where these guys see problems, we see opportunities. This is where innovation is born and disruption fueled. The counter argument will be that solutions like this is not "Bitcoin" anymore, but I say bitcoins are still used as the payment option on the customer side and that is what really matter. ^smile^

[Slow death]

It's good to know that they're praising bitcoin, but at the same time it seems like something political to me, like they want to take advantage of the popularity that bitcoin has to advertise their paypal company... why paypal do not create a way for people to add funds in your paypal accounts with bitcoin and then withdraw those same funds to your bank accounts using your debit cards? this would show that paypal really supports bitcoin, as they did not do it, So I consider their compliments as policy

[aso118]

A refreshingly different point of view from somebody in the existing payment industry. The big unknown in Bitcoin’s evolution is how will governments across the world react to it. Current global money transfer agents are straitjacketed by different regulations. Governments may try to force something similar on all companies/individuals who use Bitcoin.

[Kemarit]

It's good to know that they're praising bitcoin, but at the same time it seems like something political to me, like they want to take advantage of the popularity that bitcoin has to advertise their paypal company... why paypal do not create a way for people to add funds in your paypal accounts with bitcoin and then withdraw those same funds to your bank accounts using your debit cards? this would show that paypal really supports bitcoin, as they did not do it, So I consider their compliments as policy

I agree with you comment. Something's not right and I smell something fishy here. Lately Paypal have been praising bitcoin and I can't seems to understand that they suddenly turn very bullish and positive about bitcoin. Perhaps they are also riding on its popularity? We will find it out later.

A refreshingly different point of view from somebody in the existing payment industry. The big unknown in Bitcoin’s evolution is how will governments across the world react to it. Current global money transfer agents are straitjacketed by different regulations. Governments may try to force something similar on all companies/individuals who use Bitcoin.

There will always be two opposite side of the spectrum. Obviously, anti bitcoin governments around the world will not likely accept bitcoin as one option for a global money transfers. They still prefer the traditional way of going to the banks. But on the other hand, countries which are open to bitcoin will used it as remittances services specially nation who have a lot of overseas working across the globe.

[akamit]

It's good to know that they're praising bitcoin, but at the same time it seems like something political to me, like they want to take advantage of the popularity that bitcoin has to advertise their paypal company... why paypal do not create a way for people to add funds in your paypal accounts with bitcoin and then withdraw those same funds to your bank accounts using your debit cards? this would show that paypal really supports bitcoin, as they did not do it, So I consider their compliments as policy

Why Paypal doesn't accept Bitcoin as one of their deposit/withdrawal option could be the reason as below as stated on OP.

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

I assume that Paypal will ever accept Bitcoin or any other cryptocurrency as a form of deposit/withdrawal option, the reason is only Volatility.

[Harlot]

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

This is a very narrow minded approach to this problem and not something that cannot be managed. I know several merchants are using Payment processors to manage that risk on their behalf. These Payment processors even offer them the opportunity to hoard some of the bitcoins they received. <The merchant can stipulate what percentage should be hoarded and what percentage should be converted to fiat>

Where these guys see problems, we see opportunities. This is where innovation is born and disruption fueled. The counter argument will be that solutions like this is not "Bitcoin" anymore, but I say bitcoins are still used as the payment option on the customer side and that is what really matter. ^smile^

But there is some truth on what he is saying. Volatility is something that both consumers and producers don't want to handle especially the small ones as they don't know how to handle hit. Also one strong point that I have accepted is the argument about transaction fees from which I remember are to high compared to other payment methods, the good thing about it now is the transactions fees are getting a lot cheaper. Hopefully in the future transaction speed and fees can be on par woth other payment methods in order for Bitcoin to compete.

[Kakmakr]

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

This is a very narrow minded approach to this problem and not something that cannot be managed. I know several merchants are using Payment processors to manage that risk on their behalf. These Payment processors even offer them the opportunity to hoard some of the bitcoins they received. <The merchant can stipulate what percentage should be hoarded and what percentage should be converted to fiat>

Where these guys see problems, we see opportunities. This is where innovation is born and disruption fueled. The counter argument will be that solutions like this is not "Bitcoin" anymore, but I say bitcoins are still used as the payment option on the customer side and that is what really matter. ^smile^

But there is some truth on what he is saying. Volatility is something that both consumers and producers don't want to handle especially the small ones as they don't know how to handle hit. Also one strong point that I have accepted is the argument about transaction fees from which I remember are to high compared to other payment methods, the good thing about it now is the transactions fees are getting a lot cheaper. Hopefully in the future transaction speed and fees can be on par woth other payment methods in order for Bitcoin to compete.

It does not matter if you are a big or a small merchant. A food vendor can signup with these payment processors and get the same service as a big merchant. In many countries this is actually the norm, because AML/KYC regulations require some paper work and these payment processors can offer those businesses that service.

Try to explain to the tax authorities how you made a Net profit of $1 000 000 with your Tortillas food truck on the street corner, without some proof of sales. ^lol^

[CryptoBry]

I fully agree. Bitcoin will one day take the center stage once there will be that massive adoption...this is not happening yet and we should not expect that the road to adoption can be that easy. Remember that in Bitcoin there is no central figure or authority that will be directing the whole thing. It has no advertising budget unlike the many multi-national companies we have...it is living practically with the power of the word-of-mouth promotions. And most of all, it is still nine years old. One day it can be fulfilling its role as a currency and a store of value and even more.

[okae]

It's good to know that they're praising bitcoin, but at the same time it seems like something political to me, like they want to take advantage of the popularity that bitcoin has to advertise their paypal company... why paypal do not create a way for people to add funds in your paypal accounts with bitcoin and then withdraw those same funds to your bank accounts using your debit cards? this would show that paypal really supports bitcoin, as they did not do it, So I consider their compliments as policy

So simply, they didn't do it yet because we are in the "play stage", they are getting more benefits now without adding it to his services than adding it, while bitcoin still "cheap" because they know the potential it have, so, why not take advantage about it?, for example, by buying it directly seems much more better than add this option to his business? be 100% sure that if they could win more money by adding it to paypal, they will do it...

[darkangel11]

It's good to know that they're praising bitcoin, but at the same time it seems like something political to me, like they want to take advantage of the popularity that bitcoin has to advertise their paypal company... why paypal do not create a way for people to add funds in your paypal accounts with bitcoin and then withdraw those same funds to your bank accounts using your debit cards? this would show that paypal really supports bitcoin, as they did not do it, So I consider their compliments as policy

They are a well known anti-bitcoin company. They've been like that blocking transactions from sources known as crypto businesses for years. I remember people talking about it in 2014 and back then PP wasn't posting any opinions about cryptocurrencies. They were ignoring it and banning people who were using PP to sell coins.
Now it's a different world. The biggest banks in the world are talking about it, governments taking a stance, PP can't keep ignoring it, they have to take an official stance. I'd expect a negative one though. Maybe it's their way of saying "we're not against technology, it's just not ready yet."

Why Paypal doesn't accept Bitcoin as one of their deposit/withdrawal option could be the reason as below as stated on OP.

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

I assume that Paypal will ever accept Bitcoin or any other cryptocurrency as a form of deposit/withdrawal option, the reason is only Volatility.

They don't understand how an economy built on cryptocurrencies would work. Nobody would be under water on the transaction because there are no 15% dips in a single day when you have full merchant adoption and over a million companies all over the world using it. When everything is being priced in BTC such dips simply cannot happen and merchants don't have to go to an exchange every time they sell something. They send the coins to their suppliers and receive more product, pay taxes and bills using cryptocurrency.

[Qartersa]

There’s a lot of doubt surrounding Bitcoin’s potential as a viable, real-world currency – but PayPal’s chief financial officer sees only positive things in the dominant cryptocurrency’s future.

A `Very High Likelihood` of Success

According to John Rainey, PayPal’s chief financial officer, Bitcoin, and other cryptocurrencies will one day become a popular method of payment – just not yet. Rainey told The Wall Street Journal:

`Given the volatility of bitcoin right now, it’s not a reliable currency for transactions because if you’re a merchant and you have a 10% profit margin, and you accept bitcoin, and the very next day bitcoin drops 15%, you are now underwater on that transaction.`

Nevertheless, Rainey recognizes Bitcoin as a legitimate currency, even if it’s not quite ready for mainstream adoption yet. Says Rainey:

`At some point there is very high likelihood. The technology, there is real merit to it. I do think, though, it will be years down the road before we see the kind of ubiquity and acceptance that make it a form of currency that is used every day.`

This is not the first time PayPal has shown support for Bitcoin and cryptocurrency. PayPal was one of the first companies to accept cryptocurrency as a currency on its platform, allowing merchants the option to be paid in Bitcoin as early as 2014/2015.

Earlier this year, PayPal CEO Dan Schulman called Bitcoin “an interesting experiment” in a Facebook Live event, while also noting that “it could change the world.” At the same time, Xapo CEO Wences Casares even went so far as to predict a future in which one single Bitcoin could be worth $1 million.

Differing Opinions

Of course, not everyone agrees with Rainey’s and Schulman’s optimistic long-term assessment of Bitcoin’s future as a currency. Earlier this week, Bank of England Governor Mark Carney claimed Bitcoin has already failed on virtually every front, stating:

`It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.`

Venture capitalist and Tezos investor Tim Draper, however, recently claimed Bitcoin is “the future” of currency while claiming a large portion of the world’s currency will someday be comprised of cryptocurrencies.

http://bitcoinist.com/trends-regulation-crypto-industry-discussed-blockchain-bitcoin-conference-germany-april-4/

Seems to me that the Bank of England Governor has not been reading current business papers. Doesn't he know that a lot of countries and merchants alike are accepting Bitcoin as a medium of exchange? His statement only made him ignorant about what is new in the financial and economic markets. It is a shame considering that he is in the banking sector, yet he barely knows anything about what he is into.

While I am in agreement with the positive views on cryptos, I very well know that there is a long way to go before it will be part of the norms. The cryptos should first be improved in terms of transactions and the heavy fluctuations it suffer on a daily basis. Nonetheless, there are strong chances of it being sought after in the future.