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

[Betwrong]

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?

Yeah, I also wonder why? Maybe bitcoin on their platform is just their marketing strategy to attract more people to use their platform. Then, if people bought bitcoin they need to exchange it into a fiat money inside paypal account before they can use it. Therefore, bitcoin on their platform is useless.

I disagree.

By introducing Bitcoin on their platform PayPal showed their respect for the crytpo currency. Millions of their users(PayPal currently has 286 million active users), who would never think of using BTC have changed their minds. Bitcoin is no longer a "speculative bubble" or "financial pyramid" to them, it's a respected currency. After getting accustomed to it on PayPal's platform, they can buy real BTC outside(which I suspect is happening already).

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[Febo]

What Paypal is doing is sort of second layer Bitcoin scaling solution. Yes it is centralised. Yes it is not Bitcoin anymore. But this is what Bitcoin allows us to do and they are doing it. Just like centralised exchanges. People use them for a decade but dont really complain. Having BTC on Coinbase is similar to the moment you withdraw it. It is not really yours. Differences only that you can withdraw. You sort of can withdraw from papal to. You withdraw USD send them to some exchange and buy BTC and withdraw it. Yes, the fees will probably kill you doing this   All Bitcoin second-layers or side-chains will not be real Bitcoins. Lightning Bitcoin will be Lightning Bitcoin. Liquid Bitcoin will be Liquid Bitcoin. They will have more decentralisation then exchanges or Paypal but still. Onchain Bitcoin is only real Bitcoin.

[posi]

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I also agreed that the PayPal company can't possibly manipulate a trillion dollars market but I was actually talking about the moment when the market hasn't reach $30,000 price if you follow rumors within the cryptocurrency communities (on this forum, Reddit, etc) some people believe Paypal's trading activities impact the dump in price that happens then.

Yes, there can be an effect, but only a short-living one. I think Bitcoin is so strong today that no company, whatever they do, can manipulate its price for a long term.

Yes, i believe you are right but the reason why no company/institution what so ever can manipulate the bitcoin market price for the long term is because we are in the bullish stage and the market demand is high and once the bullish is over the market can be easily manipulated for a long-term.

[oHnK]

By introducing Bitcoin on their platform PayPal showed their respect for the crytpo currency. Millions of their users(PayPal currently has 286 million active users), who would never think of using BTC have changed their minds. Bitcoin is no longer a "speculative bubble" or "financial pyramid" to them, it's a respected currency. After getting accustomed to it on PayPal's platform, they can buy real BTC outside(which I suspect is happening already).

You are correct in your perspective.  Perhaps the bright side of this is the Crypto-related literacy step to Paypal users, but with the inability to withdraw funds.  They may have the ability to sell fake crypto.  Because with that policy, it is possible that this is just like investing money for the benefit of the platform.  While online shopping sites alone have a policy of withdrawing funds, the Paypal classmates did not make this policy.  What's behind their policy? Aren't you suspicious?

[shoreno]

the side effects can be felt to both the corporation and to the coin itself . the corporations reputation can get damage if people knew that they are fraud and selling fake products and id say it also damage the coin because people will think that its also the fault of the coin on why they got scammed or loose . not just the single coin that they bought but the effect can also spread on other coins because they will think that all coins are the same scam but if we can give a proper guidance we can avoid that to happen .

[20kevin20]

By introducing Bitcoin on their platform PayPal showed their respect for the crytpo currency.

Is it respect, or is it financial profit seeking? I highly doubt it's the former, since Bitcoin is basically PayPal's enemy. I don't think there is any respect to show in the face of a currency that's willing to literally destroy you as a business.

Millions of their users(PayPal currently has 286 million active users), who would never think of using BTC have changed their minds. Bitcoin is no longer a "speculative bubble" or "financial pyramid" to them, it's a respected currency. After getting accustomed to it on PayPal's platform, they can buy real BTC outside(which I suspect is happening already).

Using vs investing in BTC is a significant difference, and those people who've purchased BTC through PayPal definitely aren't truly "users" of Bitcoin. When people find out how difficult it is to purchase and safely store Bitcoin outside of third parties, they will likely just give up and keep holding onto what PayPal or other corporations offer.

[goaldigger]

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?

Yeah, I also wonder why? Maybe bitcoin on their platform is just their marketing strategy to attract more people to use their platform. Then, if people bought bitcoin they need to exchange it into a fiat money inside paypal account before they can use it. Therefore, bitcoin on their platform is useless.

If that’s the case then its better to Buy bitcoin in somewhere else which is more convenient and allows you to buy and sell. Maybe they didn’t fully accept Bitcoin, they just open a market for them to benefit on it but not allow users to withdraw it, such a useless way buying Bitcoin, I’d rather use CEX for this one.

[TheGreatPython]

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?

No I don’t believe that any of these things like this can affect the crypto market, especially Bitcoin. Though I’ve been thinking that the reason why PayPal has been doing this is because they are still new and they don’t have cryptocurrencies in their storage yet, so I guess they don’t want to rush into it quickly, and what they might be doing is that when you invest in their market, they then buy from other real exchanges and then keep the assets for you. Not really sure about this, I’m just saying.

But, if there are companies that are doing such thing as you have said, I think they will be at loss, because if the price should increase heavily and customers wants to withdraw their money ,the company will be the ones to be losing at a moment like this . So that’s a loss for them I think, unless they will use other customer’s fund to cover up.

[tygeade]

It shouldn't be "full cashless" though. People should have the right to own physical currencies whether on centralized or decentralized system. There are lots of benefit in the use of physical currency for society. Virtual currency could easily leave a society vulnerable to tyranny for example.

Anyway, I don't believe every society will go full cashless. It will be imposed on others or they will be decieved into accepting it.

Any sane crypto person would know that we can't be fully cashless anyway, and even though I am a bitcoin (and many other crypto) maximalist that thinks that we should be 10x of what it is right now in the future easily, and maybe even 20x in the future as well, I still think that doesn't mean that we should be fully cashless that doesn't make any sense.

What I believe would be the greatest achievement for us would be to be a common payment method all around the world. We can go to any place and they will ask us if we will pay with cash or card right? Well how about we add crypto in there as well?

How about whenever I go to anywhere in the whole world, they ask me if I want to spend cash or card OR crypto as well, that would be addition and there is no need to remove the other ones. That is why I think it could be great and I believe it should be like that, not a  cashless society, but a crypto added one.

[Betwrong]

By introducing Bitcoin on their platform PayPal showed their respect for the crytpo currency.

Is it respect, or is it financial profit seeking? I highly doubt it's the former, since Bitcoin is basically PayPal's enemy. I don't think there is any respect to show in the face of a currency that's willing to literally destroy you as a business.

Think of the Communist China. Seeing communist countries collapsing one by one, they allowed Western businesses(basically their enemy) on their territories, thus saving themselves from crumbling. Now, is it respect for Western civilization? It surely is. And PayPal is doing the same, allowing BTC on their platform, they are trying to save themselves, to get a spot in the new world economy, where Bitcoin, their former enemy, will be the king.

[cyriljundos]

selling fake crypto are popular in this crypto currency world, they will create a fake platform and deceive people for their own desire for money, you had an issue regarding paypal? i think paypal would let you cash out your funds, they are new in this industry but paypal is good company. paypal is legit and i will buy soon in paypal digital currency.

[SquallLeonhart]

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?

I guess it already started and being tested right now as well. All those "wrapped bitcoin" things are basically saying how they are actually bitcoin but in another chain, why wouldn't bank do something like that as well? Plus what banks do is not just fake crypto, just like in fiat world they could simply make sure that they give loans and expect more back when in the world there aren't enough money to pay that.

In crypto world if banks give a loan they will want more from you right? That is how loans work, so if one day 21 million bitcoin is loaned total, what happens then? How could the interest be paid? That is going to be the real problem with the world because crypto is limited.

[jaysabi]

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?

PayPal has announced you'll eventually be able to withdraw it, they're building out the capability. So OP's concern is largely theoretical since it won't exist in actuality. As a public company, PayPal wouldn't be able to get away with selling something to the public that they couldn't back up though, so even if they weren't building out the capability, their crypto sales to users would have to be backed by crypto purchases in order not to get in trouble with the SEC.

[Betwrong]

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PayPal has announced you'll eventually be able to withdraw it, they're building out the capability. So OP's concern is largely theoretical since it won't exist in actuality. As a public company, PayPal wouldn't be able to get away with selling something to the public that they couldn't back up though, so even if they weren't building out the capability, their crypto sales to users would have to be backed by crypto purchases in order not to get in trouble with the SEC.

Honestly, I was expecting this move from PayPal, because it was hard to imagine a giant with 51 billion USD in total assets suddenly decided to manipulate markets in illegal way using false coins, as OP suggested. We are yet to see the impact of this news, though. A 2% rise in price isn't enough imo. I personally wasn't able to find the confirmation anywhere besides coinpedia. Maybe that's why we are witnessing no impact yet.

[kooboat]

I believe major platforms have ways of manipulating the market,  but they all have their  limits. I doubt  how a reputable  platform  like PayPal  would try and do something  of that nature.  Nevertheless,  should they involve  in a falsification  of the real amount of bitcoin,  they would easily  be  exposed.  So far  as, no one has complained  of having experienced  undue delays in withdrawal of bitcoin,  then everything  is fine on the platform.