What are the potential side effects of corporations selling fake crypto?

[oHnK]

If you see how Paypal sells their Crypto service, it seems as if this is part of a scam. Another possibility is that these are only the initial stages of maintenance which are still in progress. As long as no one feels cheated by their services, there is no accurate evidence regarding the fake crypto they are selling. The data is that Paypal users still feel safe and secure with the services provided by Paypal so that's enough so far.

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[bryant.coleman]

If you see how Paypal sells their Crypto service, it seems as if this is part of a scam. Another possibility is that these are only the initial stages of maintenance which are still in progress. As long as no one feels cheated by their services, there is no accurate evidence regarding the fake crypto they are selling. The data is that Paypal users still feel safe and secure with the services provided by Paypal so that's enough so far.

PayPal is one of the most trusted payment processor out there, and it has been in existence since 1998. They operate as per US laws, and therefore the users don't need to worry that someone will take their money and vanish (similar to a lot many small sized exchanges have done in the cryptocurrency sector). The user functionality is limited right now, but I hope they will make full functions available to the users in the near future. For those who use exchanges such as Huobi and Kraken, there should be no issue in using PayPal. The risk involved is the same.

[so98nn]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

If you just read what you stated then it would be big disaster for the "crypto currency economy". Just crunching the numbers around but no money flooding into the cyrpto is straight away a false-trap! I am not sure if the information really true because if this would have been the case then we would have seen billions of dollars in negation graph already. Since the paypal-crypto duo, lot of people have started to invest. That's a real money and there is no way they are faking such crypto-fiat buy-sell. One, PayPal will get illegitimate crypto provider tag and second Musk himself is bitcoin enthusiast so he won't let down his investors like this. 

[Betwrong]

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What I was curious about is what selling unlimited false BTC could lead to, putting aside all the legal trouble PP would get into.. My question isn't really "Could they?", but more of a "What if?" hypothetical scenario..

I think if they sold a lot of fake BTC to their customers, the BTC price would drop, but it would drop on their platform only. That could affect the price of real BTC on other markets, but only on the level of how some news affect it - not much. Since there won't be additional supply of real BTC to the market, the price, formed by supply and demand, could drop only because of decreasing of demand from the people who took the news about low BTC price on PayPal platform seriously. Later those people will realize that PayPal's price has nothing to do with reality, and they will start ignoring it, and then another news about BTC pice on PayPal platform will not affect the market at all.

In short, as a result of the hypothetical scenario, only PayPal's reputation would be harmed, and that would be it.

[AicecreaME]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

Market manipulation would be impossible if they are just going to use numbers on screen to scam people making them think it's a real trading platform, they would just get the money, nothing else. But for sure this will make a bad image to all of the cryptocurrency, people will start to spread FUD, and the mass adoption of cryptocurrency will be too far again for us to reach if this scams won't stop.

But if PayPal would be a scam in the end, they won't get easily away with it because many people will file the right accusation to them and they would be easily get caught since they are popular and well-known.

[Saisher]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

How can they do that they are using fake stat, how would the market read that when they do not have a data integrated to sites like CoinGecko, they can show anything in their dashboard but the market aggregator like Coingecko and Coinmarketcap is still the best parameter and besides they only accept US resident only how would Asian like me knows what's they are showing.

[dothebeats]

They literally just inflate their assets by essentially borrowing your funds in exchange of an 'agreement' that they are holding something for you. If they cannot provide withdrawals for 'your crypto' that you bought from them, there probably isn't one to begin with. While I do agree that PayPal taking part in the crypto scene is bringing things closer to people, it also has its own demerits, especially the one that people aren't able to actually hold their coins. The experience is very limited to just buying and selling right now, though I hope that PayPal would soon provide actual withdrawals for their customers to get the full experience of being a bitcoin owner through the simplicity offered by PayPal's platform.

[NotFuzzyWarm]

PayPal has started selling "crypto" but they don't let you withdraw.

I'm not fully aware and only have limited information about Paypal's term related to Crypto but it is for real that you can't withdraw it?

What's the purpose of buying BTC on Paypal if users can't able to withdraw it?

For now at least, PayPal is handling BTC as part of their merchant services - in other words, just as PayPal started out years ago with fiat, buying Bitcoin there is ONLY loading a 'wallet' for use with merchants participating in the PayPal system. So while you cannot exchange back to fiat or send BTC to outside addresses from the PayPal wallet you CAN spend it at merchants accepting PayPal.

When PayPal started this they had already announced that eventually things will change. Just *when*, who knows.

[bitgolden]

You'd need to get at least a few major exchanges on board with this conspiracy, because if just one exchange tried to make fake trades, everyone would quickly notice it and then no one would use this exchange and there would be an investigation. But even with a big conspiracy to manipulate the market, researchers might be able to spot it, with mathematical tools and blockchain analysis, such abnormal trades could be spotted, and there's a huge chance the people involved would go to jail.

Well, you are sort of wrong in that regard. Paypal is not an exchange and they started to sell "fake bitcoins" and everyone loved it and bought billions in bitcoin from them. How did they sold "fake bitcoins" you say? Simple, they didn't actually give people the bitcoins, they just told people that "here it says you won 1 bitcoin" and that's it, it was actually just a number and not the real bitcoin itself, nobody actually owned any bitcoins, it was just a number on a page and that's it, if you want to withdraw that, you have to cash out to fiat and withdraw that way, so paypal never really needed to own bitcoins at all.

Did they owned bitcoins? Sure they did, they didn't want SEC to investigate and destroy them, but at least they have shown the world how you could actually end up telling people they own bitcoins without giving them the real bitcoins.

[South Park]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

We already have something similar with gold, there are gold certificates that allows you to trade but those gold certificates are not backed by real gold, so far everything seems to be OK but what will happen once the economy begins to go through big troubles and people want actual gold? What will happen in that scenario is that real gold will skyrocket and gold certificates will crash, and I expect the same to happen to whatever PayPal is doing since it is obvious they are not offering real bitcoin.

[AndySt]

They literally just inflate their assets by essentially borrowing your funds in exchange of an 'agreement' that they are holding something for you. If they cannot provide withdrawals for 'your crypto' that you bought from them, there probably isn't one to begin with. While I do agree that PayPal taking part in the crypto scene is bringing things closer to people, it also has its own demerits, especially the one that people aren't able to actually hold their coins. The experience is very limited to just buying and selling right now, though I hope that PayPal would soon provide actual withdrawals for their customers to get the full experience of being a bitcoin owner through the simplicity offered by PayPal's platform.

The PayPal platform and the platforms used by cryptocurrencies are too different in their principles and most of them are even opposite, and therefore there can be no question of a large integration in the near future, so the cryptocurrency community should still be happy that platforms like PayPal at least accept bitcoins and contribute to the greater popularization of cryptocurrencies

[wheelz1200]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

Depending on market share and depending on price per bitcoin they can do some nasty things, but I would only hurt them to want to hurt bitcoin.  If you have in fact amassed enough market share to make a dent if you did something negative it would hurt your own holdings as well as degredate your company's outlook.  But if they didn't care about these things for some reason than yeah they can hurt a lot of people

[Rengga Jati]

-snip-

Indeed, PayPal is a bit dubious, how they apply the terms & conditions. Moreover, we also cannot have the private key. Initially, I also thought, could it not really be crypto.

What's the purpose of buying BTC on Paypal if users can't able to withdraw it?

That's it. But that is what exists in their T&C about cryptocurrency.
As I quoted here taken from this PayPal Cryptocurrency - Terms and Conditions
It is said that:

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.[quote/]

It means that we can only use crypto for buying, selling, and also converting to products provided in PayPal if we are going to withdraw.

[Princejebs]

First, PayPal is well regulated and since they are centralized, I believe they know their way out when such problems arises.
I don't think it will be really easy to manipulate with PayPal  interface, their policy alone is never friendly. I don't think a customer will buy bitcoin and want to manipulate his way out of that environment.

[mezzaluna]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

One result that could affect them is that it can affect their credibility. Selling Cryptocurrencies just to boost their popularity would not be a great move for PayPal so I guess they are doing it for a reason and its a good thing that they would try and test it out right now since there are a lot of people who wanted to buy it and this gives them the opportunity to do so. I guess the only thing that PayPal can do is boost their own credibility while they are also boosting/promoting Bitcoin's utilization.

[Clement Kaliyar]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

PayPal has informed that they will be allowing the customers to withdraw the coins this year and there were reports that they purchased a large quantity of bitcoin directly from the miners and that is when the price started to rally if i remember correctly, if they are not allowing this then they will die off eventually as no one is going to spent money on numbers without the real coins.
 

[Hydrogen]

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

If anyone is ever bored search engine keywords: paypal horror stories.

There are many paypal horror stories posted on the internet. Many stories of paypal canceling accounts for trivial reasons to confiscate the holdings of its clients.

If those stories are true, would it really matter much if paypal engaged in illicit activity? If the stories are true, they may have done so for years, without being held accountable or having their user base take action.

Perhaps a question we can ask is, what action can people reasonably take if paypal abuses its role.

[magneto]

What paypal is doing is simply a version of what derivatives and CFD exchanges offer.

I personally think that this will not necessarily have a great impact on markets - Paypal would still have to comply with certain regulations that require them to hedge their positions, meaning that they can't simply create positions out of thin air to manipulate the market.

But at the same time, I am worried that people will miss the point of cryptocurrencies altogether - it is not primarily designed to be a speculative vehicle. But the way that Paypal and others are framing it eliminates the underlying technology of blockchain altogether, meaning that BTC is no longer transactional. That should be worrying but we can't do anything to stop private companies from offering these products.

[tygeade]

PayPal has started selling "crypto" but they don't let you withdraw. Hence, if you think about it, they could easily only literally sell numbers on a screen rather than a math-backed, miner-verified real cryptocurrency.

I was wondering what could happen from an economical point of view if they (or any other corporation) did this and suddenly wanted to manipulate markets using false coins. What could PayPal do to BTC?

Where you said that it can’t be withdrawn from their platform, I think the right word to use there is that you can’t send and receive. You can actually withdraw it on their platform and that’s by converting it to US dollar or any currency, before you can then send the money out or withdraw to bank.

What they do is that they don’t allow people to send out cryptocurrencies and you can’t also receive cryptocurrencies, unless you’re using their merchant services, you can then receive cryptocurrencies, but you still can’t send them out. And we can’t tell whether the coins we are buying are real or not. It’s up to you to decide whether you’re going to trust them or not, and if you happen not to trust them you can start making use of another exchange or wallet .

[ChiBitCTy]

As others have sated both PayPal and Robinhood currently only allow for buying and selling but no transferring. As much as I absolutely depside PayPal and their scummy corrupt corporation, I highly doubt that they are manipulating things in this manner.  I think regulators would be able to catch this if they were trying to do so. Just my two satoshis anyhow.