Paypal President: We're thinking about adding Bitcoin (2:50) [video]

http://www.bloomberg.com/video/paypal-sees-20-billion-in-mobile-transactions-WlokACTBRterdjHAJGNB6w.html

by tonez • 13 years ago

206 120 13 years ago

hogu• 13 years ago

that's so garbage, I remember back in the early days, they were closing down accounts used in bitcoin exchanges. Getting money into bitcoin exchanges was a huge problem.

Besides, with bitcoin, why use paypal? Is paypal going go try to act as an exchange between btc and usd?

betterunix• 13 years ago

"Besides, with bitcoin, why use paypal?"

If you have a bunch of Bitcoin money but need to do business with people who will only accept fiat currencies, you need some kind of exchange service. I suspect that is what Paypal will do.

lucb1e4• 13 years ago

Or they start to act like Bitpay, providing payment (or donation) services. In addition they could exchange BTC against other currencies at the current market rate from a market exchange like Btc-e, mt.gox or bitcoin-central.

mtgx2• 13 years ago

Instead of Coinbase being the Paypal for Bitcoin...Paypal could be the Paypal for Bitcoin.

madmaze• 13 years ago

It's interesting they showed paypal.com screenshots from early 2000's

purephase2• 13 years ago

It's changed since then?

lucb1e4• 13 years ago

Can't click this link right now. Abbreviated transcript please?

It's weird to see Paypal and Bitcoin in one sentence on the domain bloomberg.com... Bloomberg is one of the biggest financial companies and entirely against Bitcoin. I can't rhyme this; what are they saying about it?

ceejayoz2• 13 years ago

Bloomberg is a news organization too. Them not covering financial news like Bitcoin would be the weird thing - it'd be like FOX News not covering terror attacks because they're anti-terrorism.

magoghm• 13 years ago

He say's: Bitcoin is truly fascinating. For us at PayPal it's just a question of whether bitcoin will make its way to PayPal as a funding instrument or not, and we are kind of thinking about it.

lucb1e4• 13 years ago

Thanks a lot!

apaprocki2• 13 years ago

> Bloomberg is one of the biggest financial companies and entirely against Bitcoin.

You say this as if it is fact. Care to expand on why you feel this way?

lucb1e4• 13 years ago

It seemed to me that they were publishing negative news articles about Bitcoin non-stop while the price was climbing. I have a Google News Alert for Bitcoin, and (if I remember correctly) almost every day there would be some negative headline about it from Bloomberg. I then looked up what kinda website it was on Wikipedia, and it turns out they make up 1/3rd of the global financial data market. That kinda confirmed their motivations for me.

I might still be wrong of course, perhaps I should have made more clear that it was my opinion and not really a fact. To me it was like a fact, but now that you make me think about it more objectively, I realize that I can't really say for sure.

chiph• 13 years ago

Doubtful. I expect this is a tactical marketing play to associate themselves with the current hipness of Bitcoin.

jusben1369• 13 years ago

PayPal seems to have justly earned their reputation for frustrating many developers. Having said that, this is a new President and he has done nothing but say the right things since coming in. They've also realized major improvements to their API's/Docs etc. I'm not saying it's kumbaya time just yet. But I do think some reciprocal open mindedness from the developer community is appropriate to encourage further advancements in PayPal's approach to the web dev world. At least until we see that the leopards spots are no different.

purephase2• 13 years ago

Realized major improvements is a bit of an over-statement. They've made some new APIs available to US developers while completing sabotaging their existing developer toolset and sandbox environments to the point that they're almost unusable.

I could forgive this if their support seemed even remotely cognizant of these changes, but every time I get in touch with them it's like they're hearing about it for the first time.

drcode2• 13 years ago

I disagree: If they had no interest in integrating with bitcoin, the smart move for paypal would be to just spread FUD about bitcoins at every opportunity.

threeseed• 13 years ago

I disagree: If they did spread FUD they would be widely considered to be out of touch by the IT crowd. The same crowd they need to be incorporating the Paypal APIs into their apps.

illuminate3• 13 years ago

It's in their best interest to ramble about any of the current hipness and simply wait out to see about the viability of integrating it into their business. If it takes off in a non-niche way, they can claim that they were "first" thinking about it today, if BTC collapses for mainstream adoption, they can adopt the next and forget about their nonexistent "plans".

nemonoko• 13 years ago

"We're thinking about it" - They better be, because if decentralized payments hit the mainstream, PayPal's 3.9% fee is going bye-bye.

amalag2• 13 years ago

Paypal takes 3.9% ? No, you have to see how much credit card companies take and how much paypal takes. They likely get less than half that.

MacsHeadroom• 13 years ago

For international sales PayPal takes 3.9% plus a flat rate fee ($1-$5) plus a poor exchange rate which adds in a hidden 2-3%.

In total they can end up taking $12 on a $100 purchase.

But you're right, most of that probably goes to the credit card company.

tonez2• 13 years ago

The main line: "So I've been spending a lot of time looking at it. It's truly fascinating, actually, the way the currency's been designed and the way inflation is built-in to pay for miners and all that, it's truly fascinating. And I think, for us at PayPapl, it's just a question of whether Bitcoin will make its way to PayPal's funding instrument or not, and we're kind of thinking about it right now."

lingben• 13 years ago

inflation? I think he means DEflation

drcode2• 13 years ago

Bitcoin has inflation in the short term but deflation in the long term. Right now more bitcoins are still being generated, so I think the term "inflation" makes sense.

etherael• 13 years ago

Not for the next 127 years.

mckoss• 13 years ago

In 8 years (by 2021) 90% of Bitcoins will have been issued. Strictly speaking, the supply is inflating continuously, though it is unlikely to ever be growing faster than future demand (we seem to have past that point within the last year). The only reason economists would call Bitcoin deflationary is the presumption of constantly growing demand.

andylei• 13 years ago

limited supply of bitcoin means that the value of bitcoin will probably inflate. equivalently, prices of goods and assets denominated in bitcoin will probably deflate.

tonez2• 13 years ago

In the context of mining, I think what he really meant is neither inflation nor deflation, but rather issuance. (http://en.wikipedia.org/wiki/Central_bank#Currency_issuance)

jcampbell1• 13 years ago

He used an imprecise word. He meant something like "supply increase". Both inflation and deflation are incorrect because both require speculative opinions, and he was referring to the way the total number of bitcoins outstanding increases over time, which is a fact.

tlrobinson2• 13 years ago

The price relative to other currencies deflates as long as demand rises. The total number of Bitcoins inflates (at a decreasing rate) for the next 100+ years.

benhebert• 13 years ago

I expect this news alone will make Bitcoin go up $30 - $40 today.

ceejayoz2• 13 years ago

A stiff breeze makes Bitcoin go up (or down) $30-40.

viraptor• 13 years ago

It's like signal and noise. Responses to news like that are still visible on their own shortly after the event, even if the exchange rate is not stable in general.

Mahn3• 13 years ago

It already did.

axusgrad• 13 years ago

Paypal would do very well buying and selling Bitcoins. Buying bitcoins with Paypal is a very common request, which most sellers won't do because Paypal makes it very easy to rip off the seller.

eurleif2• 13 years ago

>Buying bitcoins with Paypal is a very common request, which most sellers won't do because Paypal makes it very easy to rip off the seller.

Where are you observing that it's a common request? Could it be a common request because it's easy to rip off the seller, in the same way that assistance transferring a dead relative's funds out of Nigeria is a common request?

Devilboy• 13 years ago

Go on any Bitcoin forum and the newbie section will be filled with people wanting to buy Bitcoin with credit cards, usually via Paypal. Some of those will be scammers but not all of them.

abrkn• 13 years ago

Yes, this is a very common request: http://bitcoin-otc.com/viewratingdetail.php?nick=sturles

Mahn3• 13 years ago

Bitcoin itself doesn't need PayPal, but the bigger picture here is that PayPal integrating BTC could boost awareness like few things could for the currency.

mcantelon• 13 years ago

"You'll never lose a penny while using Paypal."

Unless your account is frozen...

jonknee• 13 years ago

In which case it's still not lost...

Ziomislaw• 13 years ago

...just "stolen"

johnward• 13 years ago

Is everyone forgetting that Paypal just sucks in general?

bithive1232• 13 years ago

At least it can probably handle more than seven transactions a second, unlike the Bitcoin network. Future of currency indeed.

iso8859-1• 13 years ago

The network is P2P, there is no limit to the amount of transactions per second it can handle. MtGox is not the network.

vlasta24• 13 years ago

Oh, dear. If I were the president of PayPal and wanted to make quick buck, I would buy some bitcoins, released news like this, and sold my bitcoins the next day with a nice profit. And then, I could just deny the news, sending bitcoin value back where it was so that it is ready for the next exploiter... Heh.

But seriously, PayPal and Bitcoin are by nature rivals. If PayPal wanted to have a crypto-currency, it would develop its own, not validate and boost value of another one gaining nothing in the process.

ok_craig2• 13 years ago

A lot of what keeps regular Joes away from bitcoin is its complexity and the difficulty of keeping your funds secure. If PayPal were to make the most secure, easiest-to-use bitcoin wallet, they could profit greatly from it and also provide something that doesn't really exist anywhere yet.

All PayPal does right now is help you get dollars from point A to point B, and in the process they take a cut. They could do the same thing with bitcoin. I don't think it would be competition with bitcoin, it would be promoting it to mutual benefit.

I would be afraid of them providing this service without allowing you to export your data, however, which seems like the kind of thing PayPal might like to do. If your bitcoins were trapped in their system you're always in danger of having your account frozen as has been a problem up to now. Part of the purpose of bitcoin is to be able to avoid that, so I'd hate for PayPal to bring that whole problem to the bitcoin world.

But if they approach it properly, bitcoin could be a great opportunity for PayPal, instead of a threat.

vlasta24• 13 years ago

I am sorry I cannot agree with you.

You cannot collect profits from a transaction between 2 Bitcoin users like PayPal does right now with "real" money. If the world adopted Bitcoin, it would be the end of PayPal's business model. If PayPal were ready to replace their business model with something way less profitable, but more future-proof, it would still make no sense for them to adopt bitcoin. It would only make sense if they owned significant amount (50%) of the existing bitcoins and had the code base under at least indirect control. What would happen if this were true and the bitcoiners found out? ...too many ifs.

That said, Bitcoin will never become a commonly used currency in its current form. The built-in deflation is a fatal flaw, which makes it unusable for normal buyers or sellers. It is only appealing for "get-rich-quick" investors, which is a shame, 'cause we really need a good solution (0% fee & safe) for online payments.

ihsw• 13 years ago

Bitcoin is more than a currency, it's also a massive, international, and reliable transaction network. Furthermore it isn't tied to any individual entity (government or corporation) so there is value in its impartiality and lack of restrictions on senders or recipients.

umsm• 13 years ago

I think everyone is over-reacting... He clearly states that they're thinking about it just like everyone else...

illuminate3• 13 years ago

And the free publicity gets whatever else he was talking about heard.

milesskorpen• 13 years ago

David Marcus makes ~$1.5-2M / year, and has $11M+ in stock options, plus whatever he made from selling his last startup (Zong). I really don't think he needs to worry about gaming the bitcoin ecosystem.

Also: Developing a new currency is hard, and inherently antagonistic with other governments. BTC, on the other hand, is basically tolerated for the time being.

aioprisan• 13 years ago

aren't bitcoin transactions irreversible, making it incompatible with PayPal general policies?

bonzoesc• 13 years ago

Bitcoin transactions are irreversible, but so are cash transactions. Wrapping either currency with a transaction model that introduces a delay between commitment and transfer allows reversing during the delay.

Paypal transactions are reversible because there's a delay between me confirming the order with a merchant and the funds appearing in their account.

Paypal bitcoin would be similar; I deposit BTC with Paypal, and a week or two after I approve sending to a merchant, the merchant gets BTC in their Paypal account.

illuminate3• 13 years ago

It's a perfect method to transfer BTC ~into~ someone's PayPal account.

amalag2• 13 years ago

Paypal already encourages you to use your bank account instead of a credit card. Paypal is not Visa/mastercard. They have to make their money in addition to whatever the credit card is making. It only makes sense they look at bitcoin as a method for frictionless digital payment.

altoz• 13 years ago

It sounds like they see it as a way to get money into paypal. That is, it's no different than a bank deposit. In other words, an easy way to transfer BTC->USD ("funding instrument"). What they'll then do is dump the BTC they get on the market.

Not a bad idea, but it seems they're thinking too small.

tlrobinson2• 13 years ago

Yeah, just like Western Union was "thinking about" Bitcoin.

knodi• 13 years ago

Please don't. Bitcoin is a ticking time bomb. When it goes off you don't want to be the one holding the coins.

psionski• 13 years ago

Dude, don't mention bombs and bitcoins on the Internet. CISPA passed and if they kick your door down, you'll most probably have to pay for the repairs out of your own pocket.

khet• 13 years ago

If Bitcoin does succeed, I don't see a regular person wanting to manage his own wallet and security let alone understand all the complexity that is bitcoin.

I see Bitcoin becoming the underlying infrastructure on which companies like Paypal, Square, Banks and other financial institutions trade.

If Paypal does invest in adding Bitcoin, it would be right step ahead for Bitcoin and for Paypal.

Drakim• 13 years ago

The real win is that if it becomes the underlying infrastructure, it is still possible for the common man to have a "manual wallet".

You won't end up in walled garden situations where a single vendor controls with massive fees and restrictions, but you have no choice but to use them, because hey, that's all everybody accepts and uses.

If an online wallet service/paypal/visa is gonna keep your business, they have to make what they offer be worth their fees.

blake8086• 13 years ago

What if you have large vendors like PayPal only offering transfer to other institutionally-controlled wallets?

for example: "Since your funds are transferred only between other PayPal users, PayPal can always reverse a fraudulent transaction."

Then you would have a veritable roach motel of bitcoins.

mtgx2• 13 years ago

Wallets are never going to be mainstream the way they work right now, so for most people, online wallets are the way to go - at least until hardware wallets are a common thing, like say in the form of a ring. If that ever catches up, I think it will be the way to go for people who want to have personal wallets.

marblar• 13 years ago

Why not have it on a card in a wallet? I still expect to carry some dead tree money in this scenario.

oomkiller• 13 years ago

Didn't Paypal start out as a Palm Pilot app that transmitted money using cryptography? I think it's interesting that bitcoin is kind of the 21st century version of that.

smaili• 13 years ago

What would be the benefit for PayPal adding Bitcoin? I feel like this is analogous to BoA saying you can now login to our site using your Chase account...Doesn't make sense to me.

Havoc2• 13 years ago

BC does lack an easy way to buy them right now for many countries, so this would be welcome. e.g. I'd either have to find a local seller (unlikely) or go through 2x different online "currencies" till I get the BC.

nazgulnarsil• 13 years ago

This along with comments from Western Union have surprised me. But it does make sense. These companies would be foolish not to stay open to pivoting with market demands. Right now it is "we're aware of it", if it starts to take off I expect them to integrate it into their business models to capture part of that growing value.

Remember that in the gold rush you got rich selling pickaxes. WU and Paypal stand to profit from bitcoin with very little risk if they play it right.

unreal37• 13 years ago

Why wouldn't Paypal invent its own Bitcoin (i.e. Paycoin) and have complete control of the system? Why would they want to use Bitcoin at all?

I mean, they're the 800 lb gorilla of online payments. They'd be smarter to invent their own thing than to use someone else's if they can.

Mahn3• 13 years ago

Yeah, and for that matter, why would anyone partner with Facebook, when you could easily build another social network? I mean look at Google, they clearly pulled that off without a problem.

Bitcoin is used and has value. The same could most likely not be said about a hypothetical currency created by Paypal, specially considering one of the most important assets Bitcoin has is its decentralized and unregulated nature.

Havoc2• 13 years ago

Its strange though to mention something like that at a "thinking about it" level. If paypal were to actually implement it, surely taking the world by surprise would be the better strategy.

felipelalli• 13 years ago

Great! :)

iguana• 13 years ago

Anything that increases bitcoin liquidity is good for bitcoin. Anything that increases PayPal's market opportunity is good for PayPal.

A lot of people want to purchase bitcoins with their PayPal accounts, and since PayPal is already licensed as a MSB, this just requires technology. They can build or buy (Coinbase), and make a pretty significant revenue on conversion fees. They could also charge a small fee for bitcoin transactions over a certain amount, in exchange for convenience, or, for example, transaction insurance, which can be underwritten, eliminating the risk.

PayPal can do a lot for Bitcoin, and vice versa. If Bitcoin continues to be successful, PayPal can continue to have a significant portion of the online transaction pie.

Paypal President: We're thinking about adding Bitcoin (2:50) [video]

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