Bitcoin CutsThrough PayPal
Apparently, it’s a no brainer that cross-border transfer of money cost more in fees when using PayPal services, compared to Bitcoin transfers over the blockchain, according to a crypto enthusiast.
Crypto Michaël, a self-proclaimed full-time stock trader and technical analyst, lauded the abilities of funds transfer over the blockchain when using Bitcoin, highlighting a mere USD 5-50 in transaction fees when a bulk of USD 100,000 in Bitcoin equivalent is being sent over the blockchain. In comparison, he noted that using payment processors like PayPal would cost 30 times or more in fees – USD 1,500-4,000; for the same bulk transaction, adding that PayPal is able to lock the amount for some period.
Transfering abroad $100,000 in $BTC through the Blockchain: fees of $5-50.
Transfering abroad $100,000 of value through Paypal: fees of $1,500-4,000 + PayPal is able to lock the amount for some period
— Crypto Michaël (@CryptoMichNL) May 4, 2019
Arguably, one of the most active ecosystems where Bitcoin payments have become an effective medium of exchange is in the freelancing industry. Before the advent of Bitcoin, regardless of the payment processor being used, freelancers had to wait several days before payments would be processed and sent to them, and this only happened on the best of days when payment processors do not encounter any problems along the value transfer chain.
Another Twitter user argued with Michaël’s assessment, stating: “Yes, but at the moment to convert that BTC to spendable fiat with selling slippage and exchange costs + exchange rate costs your looking at a negligible difference between the two.”
It’s a noteworthy observation that cryptosystems also possess intermediaries – which, centralized by design, happen to impact the transfer-of-value chain; and Michaël’s assessment would only hold true when a peer-to-peer exchange is exclusive. However, the process of obtaining the funds (if not already acquired, as many merchants and business operators are yet to warm up to the idea of transacting exclusively in cryptocurrencies), is oftentimes a cumbersome task and could attract weighted fees, as buttressed by comparison guide Finder:
“For initial transfer fees, you’ll pay about the same amount for both PayPal and Bitcoin (assuming we use Coinbase as an example). But PayPal has a slight edge. When you sell your Bitcoin for fiat currency (or government-issued currency, like dollars and euros), you’ll pay another fee. Meanwhile, on PayPal you only pay a fee when you initiate the transfer.”
According to research, Bitcoin may still need about a decade worth of adoption and technical developments before it can overtake competitors like PayPal, Visa, and Mastercard, as it still lags behind in certain key transaction indicators.
Although, as it appears, many still do not believe in cryptocurrencies as an effective replacement to fiat and blockchain as a tool to eventually revamp payment processors. Still, Blockchain technology, though in its nascent state has proven to be a far more efficient means of value transfer across borders and has simplified the bureaucratic processes involved in cross-border payments for a number of businesses that have adopted the technology. The abilities of the blockchain have reached such limelight where even banks now consider moving their operations unto the blockchain in an attempt to streamline processes.
Just for kicks, while Bitcoin may be slandered – simply because of the decentralized terminology; blockchain technology (the integrity of Bitcoin technology) continues on even into rival territories.
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