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What’s the Difference Between Crypto and PayPal?


Crypto and PayPal are both credible and legal digital mediums of exchange for digital assets. When you want to pay for a service, send money to family and friends, or buy assets, you can rely on either PayPal or Crypto to perform the transaction.

Nonetheless, they are fundamentally different. So if you’re pensive about which option is best for you, these are the differences between crypto and PayPal you should consider.

PayPal = Service, Crypto = Asset

Cryptocurrencies like Bitcoin, Ethereum, and Litecoin are digital assets that hold value and exist on the blockchain technology, secured by cryptography. You can use crypto wallets to send crypto to people around the globe.

PayPal is a payment service that makes it possible to send fiat currencies like US Dollars and Euros across the world without a paper cheque.

Crypto is Decentralized, PayPal is Centralized

Crypto is a decentralized platform with no single or central control system. Decentralization means that no one can freeze your assets or restrict your trade.

PayPal, on the other hand, involves a centralized infrastructure that is under the control of its parent company. It also has a leg to stand on during financial crises since it has the government’s backing.

Crypto is Semi-Anonymous, PayPal is not

Crypto is generally anonymous since it is a decentralized payment system. Crypto enables users to exchange money without revealing their real identities.

By contrast, PayPal completely allows for 100% accountability when transacting. Both parties can see the identity of the person you are sending money to.

Crypto’s Transaction Fees Are Variable

The ability to send money from anywhere across the world is a big deal. But it is not cheap.

Crypto and PayPal make digital transactions possible and need to make money to stay in business. That is why they charge a percentage fee on all transactions.

But PayPal’s transaction fee is higher compared to crypto. One reason for that is that PayPal is a centralized payment processor.

For instance, you may pay up to a 5% transaction fee for an international transfer on PayPal. A similar transaction on Ethereum would cost around $0.79. Alternatively, some crypto users can even transfer money for free with digital currencies like Nano.  There are plenty of low-fee cryptos including Solana, Avalanche, Cardano, and more.

So, if you’re looking for the best deals when it comes to transaction fees, you should consider cryptocurrencies over PayPal.

Crypto and PayPal Use Different Security Systems

A cryptocurrency is a digital or virtual currency secured by cryptography- an advanced type of encryption. Similarly, crypto wallets support paper wallets, the most secure type of crypto wallet. On top of hard, hardware wallets like Trezor or Ledger make the thought of hacking a crypto wallet hopeless.

Like Crypto, PayPal is a highly secure financial service with end-to-end encryption technology. You can also enable personal protection with passwords or two-factor authentication to avoid common scams.

The important distinction is that PayPal is a company so you are trusting them with security. In crypto, you are in charge of your security.

Crypto Transactions Are Irrecoverable

Did you send $2000 worth of Litecoins to my wallet by mistake?

Oh, you chose Bitcoin Cash instead of Bitcoin?

I’m sorry, you can never get it back, even if I want to refund the money. With Crypto, you cannot reverse a transaction once it is on the blockchain.

This is usually a technical error common among beginners. If you are careful enough, you will never find yourself in such a red-faced moment.

But, PayPal transactions are recoverable if the recipient chooses to co-operate.

Should you happen to send money to the wrong wallet, PayPal would contact the receiver on your behalf to process a refund.

Paypal Restricts Certain Countries

Both Crypto and PayPal support cross-border transactions, but PayPal is not available in certain countries.

Experts suggest that issues like insufficient regulations, insecure banking systems, U.S tax laws, and trade bans are possible reasons why PayPal does not support these countries. Crypto is available in all geographical locations.

PayPal is More User-Friendly

There is no learning curve with PayPal. PayPal’s web and mobile interface have on-screen prompts, and an intuitive design helps newbies set up an account and carry out transactions in no time.

Although crypto sites like Exodus offer a beginner-friendly user experience, they are one in a million. Strictly speaking, some crypto wallet like Mycelium is expert-reserved.

You Can Use PayPal to Buy Crypto

One underrated aspect of PayPal that might be of interest to crypto purists is that you can use PayPal to buy crypto with fiat (government) money.

Just be aware that there are several pros and cons to using PayPal for crypto transactions.

Conclusion: Different Tools for Different Purposes

There you have it, the difference between Crypto and PayPal.

Financial technology is changing daily, and no one truly knows what the future holds. But there are some real benefits to using crypto over traditional payment processors like PayPal. Just keep in mind that crypto isn’t near as user-friendly as something like PayPal.

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