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This is not a BitPay competitor until PayPal allows users to deposit cryptocurrency. Until then it is a closed loop system, users and merchants cannot yet depos

This is not a BitPay competitor until PayPal allows users to deposit cryptocurrency. Until then it is a closed loop system, users and merchants cannot yet deposit or withdraw crypto itself, similar to Robinhood. Highly disappointed that Square (Cash) has not launched a BitPay competitor and still only supports Bitcoin. They’ve allowed BTC deposits and withdrawals for years (with great UX!) yet are lagging far behind in release cadence. The biggest barrier to spending crypto is still finding merchants that accept it, even through third parties. PayPal’s huge merchant userbase will allow dominance if/when they flip the switch to an open loop, “deposit your crypto” approach. Only PayPal and Stripe can flip that switch at scale with a hosted checkout experience. Merchants don’t care how a user paid, they want fiat.

d--b 6y ago
If paypal allows people to deposit their crypto and pay merchants in fiat, you can be sure that they’ll quickly become the biggest seller of bitcoin out there. With the illiquidity of the btc => usd conversion, they’ll have to pay the merchant before selling the btc, which means they’ll have to take a huge margin to cover potential slippage. No one wants to be the guy who sells bitcoin on a massive scale.
- miohtama 6y ago
  PayPal also does not need to hold the underlying assets. They can buy Bitcoin derivates instead of spot Bitcoin to maintain the reserves. Not sure if they are doing this, though, but it could be more capital efficient.
  - d--b 6y ago
    At some point someone needs to sell the spot though...
- ajkdhcb2 6y ago
  There are always debit cards that let you 'spend' crypto, paypal is obviously less useful than that. The volume would also be nowhere near big exchangers since trading is by far the biggest activity in crypto
- runeks 6y ago
  > With the illiquidity of the btc => usd conversion, they’ll have to pay the merchant before selling the btc, which means they’ll have to take a huge margin to cover potential slippage. Bitcoin sell liquidity is currently $162MM USD on Bitfinex at 0.5% slippage. Buy liquidity is $543MM USD (at 0.5% slippage). For comparison, the sell liquidity on Coinbase Pro at the same slippage is only $4.5MM USD. My site https://cryptomarketdepth.com/ https://cryptomarketdepth.com/ tracks the liquidity of various cryptocurrencies over time (for the exchanges: Binance, Bitfinex, Bitstamp, Bittrex, Coinbase Pro).
  - UncleMeat 6y ago
    The problem isn't volume, it is latency. It can take 30m for a btc transaction to settle. That's a nontrivial amount of volatility to exposure yourself to.
    - oconnor663 6y ago
      Could PayPal make this the customer's problem, by only allowing them to exchange or spend settled funds?
    - CryptoPunk 6y ago
      Can't they sell before confirmation? Probably on the order of 99% of transactions that propagate to the whole network with a sufficient fee end up being confirmed, and that only takes a few seconds to happen.
      - sfjailbird 6y ago
        I would go further to say that for a large portion of merchant transactions, confirmations are a non-issue. It is not trivial to pull off a double spend and no one is going to do it for a cup of coffee. The miniscule number of times that it might happen could be written off as the cost of doing business, the same way the big credit card companies quietly eat all the credit card fraud that happens.
        6y ago
- mlcrypto 6y ago
  They can hold the BTC forever and pay the merchant with their massive cash reserve or 0% interest debt. Profit
  - oh_sigh 6y ago
    They could also accept pebbles and sand as payment, hold them forever, and pay the merchant with their massive cash reserve or 0% interest debt. Profit.
    - the_local_host 6y ago
      Pebbles and sand might be safer to hold if they are less volatile than BTC. A company like Paypal needs stability, not a directional bet on an asset.
      - mlcrypto 6y ago
        USD is very stable in it's decline. Good luck
        imtringued 6y ago
        The USD is suffering from a savings glut. The domestic financial markets are already fully developed. Any additional savings from foreign nations is not helping the USA and merely forces an exorbitant downside. Investments have to match savings. All the potentially productive investments have already been made for the current level of inflation. There is nowhere for the money to go so you have two options: Unproductive investments, reduce the savings rate. Unproductive investments are basically the constant increase in stock and housing prices over the last decade. You're not buying those to make more money, there simply is no other place for the money to go. The only way the savings rate can be reduced domestically is through unemployment or underemployment. Unemployed people don't earn money but they still have to spend, which reduces savings. It's a truly hopeless situation for the humans living the USA. But hey, at least the dollar is still "good". Oh right, presidents are taking on debt to cancel the savings glut that was forced upon them. That's a bad thing.
- stale2002 6y ago
  The problem of slippage/margins is overstated. Other websites already support this. They just charge a 1% fee and call it a day. Average credit card fees are already much larger than any fee that would be required to cover price changes.
UShouldBWorking 6y ago
The biggest barrier is Bitcoin Core's deliberately high fees. Who is going to pay a $10 fee to buy a cup of coffee. Of course Satoshi had the fee problem and scaling solved from day one but when Blockstream hijacked the GitHub repo they diverted BTC to have high fees in an attempt to push users to their second layer products like Liquid and LN.
dheera 6y ago
> allows users to deposit And exchange crypto for fiat or at least USDT/USDC/some other stablecoin. Without that nobody will use the platform.
ericcholis 6y ago
I've found that OpenNode is a pretty reasonable hosted-checkout bitcoin processor. They support Lightning, and BTC to Fiat at time of purchase.
cactus2093 6y ago
> The biggest barrier to spending crypto is still finding merchants that accept it I am a huge fan of BTC and have held some for many years. But it seems to me the reason this hasn't really happened yet is just that it's not really a big problem that needs solving. Why do people need to spend crypto on online purchases, as opposed to converting to fiat and spending that? I'm sure it'll happen eventually, it's not a bad thing to give people more options of how to pay. It just doesn't seem like a huge need for anybody in countries like the US, Canada, UK, Europe, Australia, Japan (which are the vast majority of the market for companies like Paypal, Stripe, and Square).
- CryptoPunk 6y ago
  Being able to spend crypto at any merchant massively increases the liquidity of crypto - it provides more places where one can convert their crypto assets into goods and services. Reducing dependence on a small number of centralized crypto exchanges for liquidity provision is good for the decentralization and robustness of the crypto market as well. Also fiat networks can be censored by financial institutions and government, as we saw with the financial blockade on WikiLeaks a few years ago, and have seen happen against pro-democracy protestors in Hong Kong recently. Direct merchant acceptance of crypto provides an alternative when such financial controls are put in place. Merchant adoption of crypto is an unmitigated good for crypto, from any perspective you look at it from. It's puzzling to me when some crypto enthusiasts see no point in it, when it is really the entire point of cryptocurrency.
  - cactus2093 6y ago
    I would certainly disagree that being able to online shop using Paypal is the whole point of cryptocurrency. Having the ability to easily and securely exchange with others is the whole point, but doing it conveniently on a daily basis over existing payment rails is not the whole point or even that important. If a government decides to censor fiat networks to prevent certain transactions, the fact that paypal accepts bitcoin for those transactions is irrelevant. The company you're buying from as well as Paypall will still need to follow KYC laws and will be obligated not to transact with you. In that scenario you're already fully living outside the law, you'll have to transact as anonymously as possible, exchanging crypto in secret in person or over the dark web or what have you. It doesn't matter whether major above board institutions like Paypal or Stripe accept bitcoin or not.
downandout 6y ago
This is not a BitPay competitor until PayPal allows users to deposit cryptocurrency. Yes, I don't see much point to this service without the ability to send crypto to your Paypal account. I don't buy crypto through Paypal, and I suspect nobody else that knows what they are doing does either. They've tiptoed around the idea of allowing crypto deposits by allowing instant, free, fiat withdrawals to Paypal from Coinbase (where it can then be spent). But they absolutely refuse to allow it directly.
artursapek 6y ago
BitPay is already pretty irrelevant thanks to BTCPayServer

d--b 6y ago

If paypal allows people to deposit their crypto and pay merchants in fiat, you can be sure that they’ll quickly become the biggest seller of bitcoin out there. With the illiquidity of the btc => usd conversion, they’ll have to pay the merchant before selling the btc, which means they’ll have to take a huge margin to cover potential slippage. No one wants to be the guy who sells bitcoin on a massive scale.

miohtama 6y ago
PayPal also does not need to hold the underlying assets. They can buy Bitcoin derivates instead of spot Bitcoin to maintain the reserves. Not sure if they are doing this, though, but it could be more capital efficient.
- d--b 6y ago
  At some point someone needs to sell the spot though...
ajkdhcb2 6y ago
There are always debit cards that let you 'spend' crypto, paypal is obviously less useful than that. The volume would also be nowhere near big exchangers since trading is by far the biggest activity in crypto
runeks 6y ago
> With the illiquidity of the btc => usd conversion, they’ll have to pay the merchant before selling the btc, which means they’ll have to take a huge margin to cover potential slippage. Bitcoin sell liquidity is currently $162MM USD on Bitfinex at 0.5% slippage. Buy liquidity is $543MM USD (at 0.5% slippage). For comparison, the sell liquidity on Coinbase Pro at the same slippage is only $4.5MM USD. My site https://cryptomarketdepth.com/ https://cryptomarketdepth.com/ tracks the liquidity of various cryptocurrencies over time (for the exchanges: Binance, Bitfinex, Bitstamp, Bittrex, Coinbase Pro).
- UncleMeat 6y ago
  The problem isn't volume, it is latency. It can take 30m for a btc transaction to settle. That's a nontrivial amount of volatility to exposure yourself to.
  - oconnor663 6y ago
    Could PayPal make this the customer's problem, by only allowing them to exchange or spend settled funds?
  - CryptoPunk 6y ago
    Can't they sell before confirmation? Probably on the order of 99% of transactions that propagate to the whole network with a sufficient fee end up being confirmed, and that only takes a few seconds to happen.
    - sfjailbird 6y ago
      I would go further to say that for a large portion of merchant transactions, confirmations are a non-issue. It is not trivial to pull off a double spend and no one is going to do it for a cup of coffee. The miniscule number of times that it might happen could be written off as the cost of doing business, the same way the big credit card companies quietly eat all the credit card fraud that happens.
      - 6y ago
mlcrypto 6y ago
They can hold the BTC forever and pay the merchant with their massive cash reserve or 0% interest debt. Profit
- oh_sigh 6y ago
  They could also accept pebbles and sand as payment, hold them forever, and pay the merchant with their massive cash reserve or 0% interest debt. Profit.
  - the_local_host 6y ago
    Pebbles and sand might be safer to hold if they are less volatile than BTC. A company like Paypal needs stability, not a directional bet on an asset.
    - mlcrypto 6y ago
      USD is very stable in it's decline. Good luck
      - imtringued 6y ago
        The USD is suffering from a savings glut. The domestic financial markets are already fully developed. Any additional savings from foreign nations is not helping the USA and merely forces an exorbitant downside. Investments have to match savings. All the potentially productive investments have already been made for the current level of inflation. There is nowhere for the money to go so you have two options: Unproductive investments, reduce the savings rate. Unproductive investments are basically the constant increase in stock and housing prices over the last decade. You're not buying those to make more money, there simply is no other place for the money to go. The only way the savings rate can be reduced domestically is through unemployment or underemployment. Unemployed people don't earn money but they still have to spend, which reduces savings. It's a truly hopeless situation for the humans living the USA. But hey, at least the dollar is still "good". Oh right, presidents are taking on debt to cancel the savings glut that was forced upon them. That's a bad thing.
stale2002 6y ago
The problem of slippage/margins is overstated. Other websites already support this. They just charge a 1% fee and call it a day. Average credit card fees are already much larger than any fee that would be required to cover price changes.

UShouldBWorking 6y ago

The biggest barrier is Bitcoin Core's deliberately high fees. Who is going to pay a $10 fee to buy a cup of coffee. Of course Satoshi had the fee problem and scaling solved from day one but when Blockstream hijacked the GitHub repo they diverted BTC to have high fees in an attempt to push users to their second layer products like Liquid and LN.

dheera 6y ago

> allows users to deposit And exchange crypto for fiat or at least USDT/USDC/some other stablecoin. Without that nobody will use the platform.

ericcholis 6y ago

I've found that OpenNode is a pretty reasonable hosted-checkout bitcoin processor. They support Lightning, and BTC to Fiat at time of purchase.

cactus2093 6y ago

> The biggest barrier to spending crypto is still finding merchants that accept it I am a huge fan of BTC and have held some for many years. But it seems to me the reason this hasn't really happened yet is just that it's not really a big problem that needs solving. Why do people need to spend crypto on online purchases, as opposed to converting to fiat and spending that? I'm sure it'll happen eventually, it's not a bad thing to give people more options of how to pay. It just doesn't seem like a huge need for anybody in countries like the US, Canada, UK, Europe, Australia, Japan (which are the vast majority of the market for companies like Paypal, Stripe, and Square).

CryptoPunk 6y ago
Being able to spend crypto at any merchant massively increases the liquidity of crypto - it provides more places where one can convert their crypto assets into goods and services. Reducing dependence on a small number of centralized crypto exchanges for liquidity provision is good for the decentralization and robustness of the crypto market as well. Also fiat networks can be censored by financial institutions and government, as we saw with the financial blockade on WikiLeaks a few years ago, and have seen happen against pro-democracy protestors in Hong Kong recently. Direct merchant acceptance of crypto provides an alternative when such financial controls are put in place. Merchant adoption of crypto is an unmitigated good for crypto, from any perspective you look at it from. It's puzzling to me when some crypto enthusiasts see no point in it, when it is really the entire point of cryptocurrency.
- cactus2093 6y ago
  I would certainly disagree that being able to online shop using Paypal is the whole point of cryptocurrency. Having the ability to easily and securely exchange with others is the whole point, but doing it conveniently on a daily basis over existing payment rails is not the whole point or even that important. If a government decides to censor fiat networks to prevent certain transactions, the fact that paypal accepts bitcoin for those transactions is irrelevant. The company you're buying from as well as Paypall will still need to follow KYC laws and will be obligated not to transact with you. In that scenario you're already fully living outside the law, you'll have to transact as anonymously as possible, exchanging crypto in secret in person or over the dark web or what have you. It doesn't matter whether major above board institutions like Paypal or Stripe accept bitcoin or not.

downandout 6y ago

This is not a BitPay competitor until PayPal allows users to deposit cryptocurrency. Yes, I don't see much point to this service without the ability to send crypto to your Paypal account. I don't buy crypto through Paypal, and I suspect nobody else that knows what they are doing does either. They've tiptoed around the idea of allowing crypto deposits by allowing instant, free, fiat withdrawals to Paypal from Coinbase (where it can then be spent). But they absolutely refuse to allow it directly.

artursapek 6y ago

BitPay is already pretty irrelevant thanks to BTCPayServer