The bitcoin and cryptocurrency community has been set alight by news payments giant PayPal PYPL +4.9% will allow its 346 million users to buy and spend bitcoin and a handful of other major cryptocurrencies.
The announcement, coming from a traditional financial industry giant and perceived enemy of bitcoin, has been taken as vindication for long-time bitcoin believers. However, celebrations were somewhat stifled by small print that revealed PayPal wouldn’t let users transfer their cryptocurrency into or out of PayPal—nor would users have control of the private keys, a long string of numbers and letters that allow holders to move their digital assets. “Currently, you can only hold the cryptocurrencies you buy on PayPal in your account,” the company wrote in materials outlining its bitcoin and crypto plans. “Additionally, the crypto in your account cannot be transferred to other accounts on or off PayPal.”
PayPal didn’t respond to an enquiry asking whether bitcoin and cryptocurrency withdrawals would be allowed in the future. The news has divided the bitcoin and cryptocurrency community, with Satoshi Labs, the creators of cryptocurrency hardware wallet Trezor, warning people to avoid PayPal altogether—invoking the cryptographic mantra: “Not your keys; not your coins.” “Do not use PayPal for bitcoin; there are many other places to buy crypto which will let you keep ownership of your coins,” the company wrote in a blog post, suggesting PayPal’s plans for cryptocurrency adoption are probably not because they want to spur healthy adoption and pointing to comments made by former PayPal chief executive Bill Harris in 2018 that bitcoin is “the greatest scam ever.”
“PayPal is conceding to bitcoin, and the many other aspirational, educational projects within the community should be highlighted to prevent newcomers from falling into a trap of trusting one of bitcoin’s greatest long-term adversaries.”
To not hold your private keys or transfer from the platform makes no sense in buying bitcoin from PayPal