4 ms·
PayPal and Cash, for example, can charge fees for various BTC services, like USD to BTC conversion. To do this they need to hold some BTC. They might not care a
by jt2190 6y ago
PayPal and Cash, for example, can charge fees for various BTC services, like USD to BTC conversion. To do this they need to hold some BTC. They might not care about whether the value of the BTC increases or decreases, as long as the fees generated make it worthwhile.
- Scoundreller 6y ago> need to hold some BTC Do they? Why can’t they drop-ship it?
- ur-whale 6y agoNot sure what you mean by drop-ship it, but when Paypal tries to sell what essentially boils down to a promissory BTC-denominated note to the unsuspecting masses, it's quite likely that the regulator (e.g. the SEC) may come at some point and inquire how much of the underlying they actually own. If they are found to be below a certain ratio of the actual BTC denominated liability, they may run into quite a bit of trouble. As a matter of fact, if they were playing it straight they could cryptographically demonstrate actual ownership of the underlying. They will - of course - never do that. That'd be missing out on one hell of an opportunity to play bookie in the BTC sphere.
- csomar 6y ago> If they are found to be below a certain ratio of the actual BTC denominated liability, they may run into quite a bit of trouble. I highly doubt PayPal is playing that game. Bitcoin is highly volatile and can x10 its price easily. That could bankrupt PayPal overnight if people tried to sell in the short-squeeze.
- 1996 6y agoI would prefer it if I didn't have to trust paypal word, and could cryptographically verify their fractional ratio - because in case of a boom, if everybody wanted to get their promises riches, that could also bankrupt paypal overnight. Actually, the SEC may also want to check whether paypal promissory notes are actually backed by anything but thin air.