PayPals Bitcoin is a scam

[Zackgeno96]

The rates in PayPal via trading platforms are often too good to be true. Then a light should come on that things are not right. Paypal is also known for allowing people to file a complaint. And then they can claim back their madness for up to six months or a year, for example. and then you sent the bitcoins, you lost them. I am not saying that everyone works like this, but there are certainly a large group of scammers who use this method via Paypal with rates that are too high.

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[Anonylz]

1) Revolut does the same thing IIRC, you can't transfer out the bitcoins (either to someone else or a wallet you own) or to pay something with. Does it mean Revolut is a scam too?

2) The person doesn't own the keys, perhaps but it's the same thing with Coinbase for example, so Coinbase is also a scam?

3) Paying someone with bitcoins: if I'm correct on their press release they said it could be used to pay a merchant, so people will be able to pay someone with (the merchant). The fact you can't do it with a random individual is something else.

The definition of a scam isn't what you describe. We are only at the beginning and the service could very well be improved in the future.

Yeah, people like to throw the word "scam" around without any full knowledge of what they say, it is no longer news that PayPal do not support the withdrawal of btc from the wallet, isn't it same thing with exchanges, many people including me have some (if not all ) of their assets in one exchange or the other without owning the keys to the wallet,
Now you mention about revolut, i haven't use them before so i can't say much about what you say, but if that is the case, i don't see people calling them out or tagging them as scam for not letting users to be able to transfer btc to other wallet or withdraw, i believe the thing with PayPal will get better with time, who don't like their service need not use it.

[DaveF]

As of now it's the same as the BTC you get from RobinHood.
Can't withdraw it, can't send it.
But you can buy it at "X" and if it goes up sell it at "Y".

And that's it.

Since they are both US regulated businesses I am assuming they are buying and selling BTC on the open market and just making some money through the spread.
If they are not actually acquiring the BTC that would be a different story. But, I think they are. I also think it's such a small amount of BTC being bought and sold through both of them that it does not even make a difference in price. Nobody is going to wake up and buy 15000BTC through either place. There are better services with better pricing.

-Dave

[20kevin20]

I'm quite surprised to see so much PayPal support coming from older members over here. One particular thing I do not like is that I have only heard stuff like "you don't own the keys" and "you can't withdraw". The keys part seems kinda fine to me - the service has to hold your keys under custody because otherwise if you're suspect and the gov wants your money to be seized, PayPal should force your funds under seizure for suspicion, if that makes sense. On the other hand though, they could've simply made it possible to hold and use your BTC as a non-custodial wallet and, if you wanted to, to allow you to also sell it to them for fiat.

But is the "Bitcoin" being sold on PayPal the real thing or is it just a coin linked to its price? Because if the latter is what they're selling, then they're literally selling you fake Bitcoin under the real thing's name. I wouldn't mind if the pegged coin was being sold if the name would've warned you about it.

Moreover, and the worst part of everything, is that selling the fake thing under the real name (so basically misleading) means they can generate as many BTC as they like, artificially inflating or deflating the market to their liking.

[Pffrt]

Damn, I just had made a comment on this. Even if they would allow withdraw, it would be a total disaster once a lot of users at once tried to withdraw their BTC. Well, this is really a total shit system.

[crankmunnaa]

not understanding your point of view clearly...but if exactly happens this then it's is not good for bitcoin and block-chain system...

[nebuch]

for me too early to conclude PayPal is scam. Why? Good reputation matters most than just to earn money from crypto or PayPal's costumers. PayPal will not allow to put their millions of supporters in danger position. They understand how everybody's wishing the best for PayPal besides fiat transaction. The world is getting to super advance means of transaction to the point some develop a cashless method and adopt cryptocurrency. PayPal is a huge company, so, normally they will integrate whatever the necessary just for their costumers. PayPal will not put themselves in a dangerous game like "scam word."

[noorman0]

I don't think it's a scam. This is Bitcoin, where paypal will have a little trouble finding and ensuring the identity of the sender and receiver bitcoin addresses clearly.

So as a trusted platform for a long time, it won't be that easy to activate the deposit/withdrawal/or send of bitcoin between users feature without adjusting the regulations of each country supported by PayPal and several other considerations. Paypal will be careful with this.

[o_e_l_e_o]

Best we reserve judgement until their third party custodian, Paxos, provide evidence of full reserve.

Which they will never do, and even if they did, we have no way of verifying. Paxos supply an address with 1,000 BTC in it and say "This belongs to PayPal." How can we verify that Paxos isn't running a fractional reserve and that 1,000 BTC also "belongs" to a few dozen of their own customers as well? How can we verify that PayPal haven't actually sold 10,000 BTC to their customers, yet are only holding 1,000 BTC on Paxos? The whole system is just layers upon layers of blind trust.

PayPal has made it clear that they will allow withdrawals and payments using Bitcoin, once the testing phase is over.

Can you provide a link please? I haven't read anything along these lines.

So as a trusted platform for a long time

Whatever happened to "Don't trust. Verify."? The whole point of bitcoin is to not rely on trusted third parties. All you are buying through PayPal is exposure to bitcoin's price - you are not buying, and do not own, any bitcoin.

[chanler]

.............

Are you sure describing this as a scam? Well, I think we need to have a similar perception and description of what meant by scam here.

I read this from PayPal

You currently are NOT able to send Crypto Assets to family or friends, use Crypto Assets to pay for goods or services, or withdraw Crypto Assets from your Cryptocurrencies Hub to an external cryptocurrency wallet. If you want to withdraw the value from your Cryptocurrencies Hub you will need to sell your Crypto Assets and withdraw the cash proceeds from their sale.

Taken from PayPal Cryptocurrency Terms and Conditions

It is written "currently"
Does it mean that someday it may change and will be changed? Expect they said: You never, it means forever.
This is still at the beginning of PayPal concerning crypto. SO, let them work and also develop. I believe that PayPal will always make certain evaluations and review about how it works and develop.

So, just too early to say that Bitcoin in PayPal is a scam.

[20kevin20]

It is written "currently"
Does it mean that someday it may change and will be changed? Expect they said: You never, it means forever.
This is still at the beginning of PayPal concerning crypto. SO, let them work and also develop. I believe that PayPal will always make certain evaluations and review about how it works and develop.

So, just too early to say that Bitcoin in PayPal is a scam.

Unless PayPal's customers revolt against the way they're functioning, it's never going to change. All they need is enough volume to keep it all going. If that ever changes (and I doubt it will), they would probably just back out of the crypto business or find yet another way to do their tricks.

The way they've begun working with cryptos tells, for me, everything about their intentions.

[pawanjain]

Paypal is a big company and I don't it will scam it's customers that easily. Besides that we should not judge a company like Paypal that soon.
We should wait until the service announced is ready to be implemented in production. May be there are future developments planned which will allow users to deposit/withdraw bitcoins.
To be honest, describing Paypal as a scam is too harsh on them for now.

[Viscore]

Paypal is a big company and I don't it will scam it's customers that easily. Besides that we should not judge a company like Paypal that soon.
We should wait until the service announced is ready to be implemented in production. May be there are future developments planned which will allow users to deposit/withdraw bitcoins.
To be honest, describing Paypal as a scam is too harsh on them for now.

This is not about the scamming issue(assuming that they are not capable of doing it) but this all about unclear services they offered.
You can deposit in Bitcoin but can't withdraw it, but you can spend it buying other stuff which is a trick that we ever don't like it. This PayPal had no longer be a part of crypot if this is only a thing they can do. That was not people had been expecting for PayPal but just like to see the same with other exchangers.

This is a way about that traders will just ignore Paypal.

[target]

It does sound scam to me.

If they get your money and you don't get in return what does that mean?  Just because its Paypal, doesn't mean everything right. Banks had been doing all kinds of laundering themselves but it often looks legit but closely looking into what they are doing is exactly laundering.
But let's see what they could come up with because right now it only appears like they are collecting data of their users who want to buy BTC.

[avikz]

To recap :
- You cannot withdraw your Bitcoin
- You cannot Pay anyone ( ironic ) , so it can't even go to another PayPal account
- You dont own the keys

For discussion may I ask, what's the use of the bitcoins if you are unable to withdraw or unable to send it to another person? While PayPal is a global company they must have some reasons for not allowing these actions!

Probably they are trying to become a centralized exchange service where you can buy bitcoin and sell it to paypal itself. Centralization at its best!

[o_e_l_e_o]

You can deposit in Bitcoin but can't withdraw it

You can neither deposit nor withdraw bitcoin from PayPal.

but you can spend it buying other stuff

You cannot spend bitcoin using PayPal. If you want to buy something with your bitcoin, then you must first sell that bitcoin back to PayPal and then buy the item using fiat. The only thing you can do with the "bitcoin" you have bought on PayPal is sell it back to PayPal.

While PayPal is a global company they must have some reasons for not allowing these actions!

Bitcoin is their competition. If bitcoin payments become widespread online, then the need for PayPal greatly diminishes, and so too does their profit. Make no mistake - they are not doing this because of some desire to aid bitcoin adoption or to make bitcoin more accessible to more people. They are doing it for one reason only, and that is to make profit from the high fees that they will charge. They are deliberately doing it in a way which requires the least amount of effort and investment from them, and also does not allow the customer to actually use bitcoin or increase adoption.

[acener]

We really need to stop using the "scam" word as a sort of synonym to "bad service"; because obviously there's a HUGE difference between the two.

PayPal's cryptocurrency-related services are definitely very very limited, but it has been the same with Cash App in the past. The likeliness of what's going to happen is, it's a slow rolling out of features; because I'm pretty sure PayPal is totally aware that bitcoin is really hot right now, and it's smart for them(business wise) to take advantage of this hype and roll out their buy/sell feature asap.

This is what I am looking for.
People tend to use scam so much even if it is just a bad service.
I haven't use or read the TOS of Paypal regarding to crypto or Bitcoin but I know that one thing OP tells is true if we use them as Bitcoin wallet we wouldn't own or hold our own private key.
And I think it is only the beginning they would improve their service in the future (Hoping for those who would use their service as a crypto wallet).

[imstillthebest]

- You dont own the keys

with all that you have said this is the only one that is correct . that sounds funny when paypal introduce crypto for nothing .

paypal are also going to be a clown for doing that . what they do they want,  to hype cryptos only ? but that is if there will be people that will buy crypto for nothing , what are they going to do with that . decoration on thier paypal accounts ?  of course all of this is a lie and we all arent convinced mate . sorry

[ilovealtcoins]

We cannot withdraw bitcoin because it only exists in the Paypal system. That would be fine because the Bitcoin we own on Paypal is safe and guaranteed by Paypal. What's so bad about that I still see out there that there are a lot of people who do not carefully manage bitcoin and either let the hackers take it away forever or they forget their private keys. Bitcoin's value comes from circulation, and I'm happy that Paypal accepts Bitcoin.

[SaveOurSea]

Paypal Scam? very funny, they can't be a scam,
everyone knows that Paypal is the world's largest digital wallet platform,
especially now that they are trying new things, they are unlikely to be a fraud.