Cryptocurrencies are viewed as investments as well as payment mechanisms and smart contracts. There are many uses for these products, including paying bills and vendors for goods and services. Smart contracts have yet to be widely introduced, but at some point in the future, you will be able to see if the organic lettuce you purchase has a tag that shows the original farm, which will not be able to be changed. Until recently, few payment processors allowed individuals to use cryptocurrencies to make payments, or bitcoin trading. This scenario all changed when PayPal announced it would allow vendors to accept bitcoin on their network.
PayPal Accepts Bitcoin
In October of 2020, PayPal announced that the company would allow vendors to accept bitcoin for goods and services. The millions of vendors across the platform would not be able to charge customers in bitcoin instead of fiat currencies. The change to their platform also would allow investors to purchase and sell bitcoin on the PayPal platform. In March of 2021, PayPal said it would let users checkout with Crypto, offering Bitcoin, Litecoin, Ethereum, or Bitcoin Cash. According to PayPal, users who have enough cryptocurrency to cover a potential purchase on a website that accepts PayPal Checkout will see it pop up as a payment option. If a customer decides to choose the cryptocurrency option at checkout, PayPal will complete the transaction. PayPal also won’t charge a transaction fee. While there might still be transaction fees when you change your fiat currency into a cryptocurrency, there will be no fees for vendor transactions. This change will encourage vendors to use cryptocurrency.
PayPal CEO Dan Schulman said that enabling cryptocurrencies as a payment mechanism would provide mass acceptance of digital currencies. While PayPal makes the process of buying and selling products easier for those who want to use cryptocurrencies, they are not the only place that will accept bitcoin. Tesla announced that it would accept Bitcoin as a form of payment from customers. Tesla CEO Elon Musk said those payments would be retained as Bitcoin and not converted to fiat currency. Telsa also reported to the U.S. Securities and Exchange Commission that the company had purchased 1.5 billion worth of bitcoin to provide liquidity to its customers that planned to purchase Telsa vehicles using bitcoin.
How Can You Use Bitcoin in Your Daily Life
As payment processors like PayPal begin to accept bitcoin as a currency, it will allow you to make everyday payments using cryptocurrency. The key to widespread acceptance is that more vendors will need to accept cryptocurrency for you to use it at a grocery store or drug store. Once these vendors begin to accept bitcoin, you will be able to use your PayPal debit card to make a payment to a vendor that accepts cryptocurrency.
The Bottom Line
The upshot is that while cryptocurrency is beginning to gain widespread acceptance, it still is viewed by many as an investment vehicle. The volatility in the price of bitcoin has led many vendors to be leery of accepting it as the price can change rapidly. The announcement by PayPal that it will accept cryptocurrency and allow the millions of vendors that accept PayPal to transact in cryptocurrency is a game-changer. PayPal announced that if a customer has enough cryptocurrency in their account to pay for an item, it will now show up as an option for payment.