Comparisons between PayPal and bitcoin are always tempting to make, simply because both are meant to make it easier to make purchases digitally. Really, they’re entirely different things though. PayPal is a service that streamlines the process of making digital purchases with a credit card; bitcoin is a wholly digital currency operating in its own financial ecosystem, so to speak, via the blockchain. Despite this massive difference however, and the fact that a direct comparison is inherently a flawed idea, there’s something to be said for the idea that PayPal is a model for bitcoin’s future. In other words, it’s conceivable that the way we look at PayPal today is a sort of best case scenario for leading digital currency that a growing number of people see as a faltering experiment.
Consider the following.
PayPal’s Bank-Like Evolution
It still sounds almost ludicrous to say, but lately there have been completely legitimate debates as to whether it’s wise to replace a bank with PayPal. Realistically not too many people are making that full transition, but the very fact that it’s being discussed speaks to the fact that PayPal has embraced a handful of bank-like features that at least make it possible to treat it accordingly. This may in some ways be an ideal future for bitcoin. The idea that one’s bitcoin wallet could handle direct deposits, check deposits, and even issue debit cards loaded with bitcoin-based, usable money, has to be awfully appealing to bitcoin advocates.
PayPal For Digital Purchases
Most people generally understand that PayPal is used to make buying things online easier. But there’s actually a specific focus on purely digital purchases that should be noted specifically. For instance, some of the most popular streaming services allow for PayPal-based transactions. Subscribing to Hulu, as an example, can be done without ever entering credit card information. Similarly, some of the busiest online gaming platforms work the same way. There is in fact a whole category of PayPal sites within the casino business online, once again welcoming digital payment for a digital product or service. It’s in this space that bitcoin seems particularly well-suited, and where it has in fact made some in-roads already (such as in gaming).
This is a quick point, but within the idea of PayPal being highly useful for digital purchases is the fact that a lot of sites – for digital purposes or for material purchases, in fact – now have a PayPal Checkout button that makes the process even quicker. Given that one of the true barriers to mass bitcoin adoption is the fact that conducting a transaction can be somewhat complicated when you’re just starting out, this seems like a very valuable precedent. Should online point-of-sale tech regarding bitcoin reach anything approaching the level of convenience of PayPal Checkout options, bitcoin will suddenly get a lot more appealing to use.
A Reputation for Security
PayPal has a reputation for being safe, and this is perhaps the single most important thing for bitcoin to cultivate. Right now, bitcoin has more of a reputation for intending to be safe. That doesn’t mean that it necessarily falls short – just that people understand it’s intended to be a secure option, but haven’t built up personal trust just yet. Unfortunately for bitcoin advocates, following PayPal’s example in this particular area may be more about time than anything else; it’s not a simple shift in technology. However, it’s still worth noting that if bitcoin can ultimately establish a similar reputation, it will be on its way to a more useful future.