Topic: How degenerate is it buying and sitting on PayPal Bitcoin ? (Read 1198 times)

Hurr durr muh name is Berb and I just burt sum mur $100 USB worth of PPBTC @ $28,690.62 becurse meesa durr.

Alcohol is definitely involved.

I just did it again. Just stacked another $100 in PPBTC @ $28,852.21 USD/BTC.

Going full-retard here.

Yeehaw.

I don't love Paypal much at all.  I have used them for 17 maybe 18 years.

I sold a lot of modded mac mini's on eBay 2006 to 2014 then apple made the gear too hard to mod. I shift to BTC and pc builds.  SO I would like to thank ebay ,PayPal, and apple for being here on bitcointalk.

I will end up buying around 1000 usd over 2021 . added to my 550+

I have seen reports that PayPal is planning to introduce these features next year and we have already seen reports about them purchase huge amounts of coins directly from the miners.

I am yet to purchase using PayPal as i am not comfortable with the current process as you cannot hold the coins and when they start allowing to withdraw the coins then i might use the platform. When filing the tax all the other incomes can be termed as long term capital gains and i did file like that in the past when i profited from the last rally.

Absolutely nothing is stopping me from doing this.

I figured I'd dip my toes into this PPBTC shit to the tune of at least 4 digits USD, and see what happens.

As others mentioned already, I kinda get the "moral imperative" part of supporting any new Bitcoin on-ramp, but it's distasteful AF to me.

Won't be cashing out the coins until at least this time next year, for long-term capital gains reasons. Hopefully Paypal allows withdrawal of BTC into your own custody by then so I won't have to cash out at all.

I would say paypal money is a lot better used buying bitcoin directly instead of from them. I mean what stops you from withdrawing that money to your own bank account, then use that money to buy bitcoin? If you are involved with bitcoin that is a better way to do it. Obviously for people who are not familiar with bitcoin, it makes sense to spend that money on paypal itself to buy bitcoin, since you are not very familiar with bitcoin you may not know where else you should do it and could maybe trust paypal more than you trust other places, so it makes sense to buy directly from paypal.

However if you are already in the crypto world and if you already own bitcoin yourself, and if you already did all of this before, withdrawing that money to your bank account and buying bitcoin and putting it in your wallet is a lot safer and a lot better option if you ask me.

Post made me smile, chortle a bit too loud for my comfort really haha, would merit if I had any but yeah man, that is pretty much as degen as it gets. Would definitely have stuffed some in myself if I had the option open.

Kind of crazy to see the weekend rally ongoing. Still surreal to remember $1000 BTC and wondering if it would hold...

I gave you 1 merit bob how about that.


I am doing 3 things at the same time.

stacking in PayPal
selling on coinbase.
holding mining coins.

I have reached a point of being confused as what to do next.

I just bought another $100 worth of PPBTC @ $26,666.

What are you gonna do about it. Huh ?

I'm ok with that, but aren't exchanges real companies?
I'm also ok with new companies entering the space, why shouln't I be, but this doesn't mean I'm to support every single one.
I don't like how PayPal's idea works for both fiat and cryptocurrencies that's why I've never used them for fiat and I'm not going to use them for bitcoin.


They aren't mainstream YET, but some are on the right track with millions of fiat curencies exchanged every day.


You're right but I'm going to buy as much time as possible and avoid companies that are going to spy on me for sure like Coinbase, Gemini, PayPal and similar. Some people here use  
For now I don't pay no capital gains if I hold for more than a year but I'm also doing my best not to get tagged because it's hard to explain how you got those bitcoins in the first place. If you have a lot of bitcoins that you haven't bought on exchange with KYC you're seen as either dark web trader, sex worker or some other money launderer.

Fine, I'm half your age and I don't know what I'd do if I were at my 60s, but I still wouldn't be ok with PayPal spying on me and not providing me with my private keys. Not saying that you shouldn't use them but many people won't because the same thing can be done cheaper, without KYC and with less fee somewhere else.

Degeneracy continues. Just bought another $100 worth of PPBTC. Stacked about 0.07 PPBTC total, so far.

I'm legitimately surprised they are incentivizing crypto purchases, especially with this large of a rebate. If customers only do the minimum purchase, that's a 25% rebate. It's still a zero fee period too.


No doubt about that. Square was going to eat them alive if they didn't make this move.

Well it is not for you.

But if you want to mainstream btc you need to use real companies.

Exchanges are not mainstream.
Paypal is mainstream.

So what is mainstream in your country?
You need to realize that in order for mainstream acceptance it is going to be tax reportable if your country charges taxes.

to quote you "...I don't want my name to go to some tax agency with a label "owns bitcoins". "

All mainstream in almost all countries will involve taxes.

So I am just saying most people in bitcointalk miss out on what mainstream is if they think it won't be taxable.

In my country USA both coinbase and PayPal will report my holdings to the IRS.  I will pay the tax and do my accounting correctly.

I did not ask "to be born in the USA"

My birthplace was decided with out my consent. At my older age of 63 I am not going to move out of USA. So for me to correctly support BTC I pay taxes.

Anyone in my position already playing the game legally that can buy PayPal BTC legally should.

Not that they need to buy a lot just some.  Hell PayPal just gave 25 dollars to buy 100 usd worth of BTC and I did.

Is Paypal charging a % fee to hold BTC or they will gain from the spread cost probably  ?    I checked for an email like you posted but I have not received anything about BTC just a general bonus if I log into a long time unused account, better then nothing I guess.   I do remember Paypal stating an inactivity fee coming into play but when I last looked it wasnt overly harshly enforced.


Pixie thats a fair point and its true generally if you dont have keys then you are effectively lending your BTC to that company for free.   However convenience means this is common and Paypal is hoping to capitalise on the mainstream population moving into the Bitcoin realm.    Its arguable who gains more here, Paypal from % business addition or crypto from reputation and the monetary inflow from people who wouldnt come into this sphere of influence otherwise.
  Alot of people took this as bullish and price no doubt rose from the news but I think its secondary effect further down the line that really matters, for now this is all speculative not hard line actual population increasing usage, reliance and utility via BTC.   The difference matters because speculative flows reverse far more easily and I still assume we can go back to 10k in stormy weather.

I want it to go mainstream and I want to buy it, but why should I use paypal to do it when there are easier, faster, cheaper ways?

I don't have a paypal account. I don't have a USD bank account. I don't live in the US. I know that PayPal's fees are ridiculous when it comes to foreign currency transfers and such.

I don't trust PayPal, I don't want my name to go to some tax agency with a label "owns bitcoins".

I value my privacy, therefore I will not be buying through paypal, which doesn't mean I will not be buying at all.

I don’t think there is anything wrong with investing in Bitcoin thru PayPal. The way that people get their Bitcoin stolen left and right it’s a good thing if the actual coins are not in their custody but instead inside PayPal’s which is more secure.

You don’t have to worry about someone hacking into your PayPal and stealing your Bitcoin, because they can’t withdraw it anyways.

Sure you can’t withdraw it but most people just are in it for the money and not technology so they don’t really care. As long as their in profit they are happy.

Only issue is the high fees that they will charge. It’s like 2% one way so 4% round trip pretty much. Which are crazy high but still cheaper than a Bitcoin Atm which is like 10%.

Oh yeah I tossed a few hundred into it so far



I think 380 usd which is now worth about 530 and a 25 dollar voucher to use with any PayPal purchase.

By Jan 1 2022 I will have put in around 500usd maybe 600usd

Yep, I would agree than buying PPBTC for than just fun isn't the smartest option around. I found the PPBTC as a way for PayPal to monetize over the hype without risking anything. PPBTC is similar to CFD - not the real deal.

It does not seem strange to me about Paypal, if only with the fees so high in front of each transaction made with Paypal, just thinking about the fee with Bitcoin will be something monumental, Paypal will never lose, if the big paypal clients like OP happened to something like that, it is difficult to enter there with small amounts to make transactions with Bitcoin.

I have been with them from 2002 or 2003.  No issues or real problems.

I do know someone that was closed out he did a 5 to 6k callback on mining gear that never arrived paid with PayPal.

PayPal did pay have and then closed him "out for life" IIRC

Avoid PayPal, they are no good. They are providing this option to ensure that they keep their user base.

Note that PayPal has a reputation to cancel merchant accounts without providing any reason and will block withdrawal of funds for 6 months or more.

User accounts are suspended for vague reasons as well including buying and selling crypto too often. They do this because THEY CAN and are bad news for anything in the financial system.

Funny thing I have been with PayPal since 2003 maybe 2002.  I have three accounts two super active one almost never used.

So I grabbed say 160 and say 100 for the two active accounts.  They are now worth 260 and 177 or

260 became 437


Today I got an offer to buy 100+ of BTC and get a 25 usd voucher for the less used third account.

So I just did that. So I now have put in 360 to get 537 and I have a $25 coupon to use as I please as long as seller takes PayPal.



That offer will be done for 40000 people.

Give me a minute to show screen shot of offer.

For me personally I see paypal as a crooked company that will end up screwing their customers somehow.  But hey how no different from any other crypto exchange.  Only part I dont like is letting them hold it in their custody.  I wouldnt trust their storage opsec.  I find it more for the normies than that of people who have been in crypto for awhile.

I'm not overly concerned about the political stuff. I think there is a very strong contingent of Bitcoin holders and users, as well as more ethical exchanges (at least regarding Bitcoin politics) like Bitfinex and Kraken who will continue running full nodes. I also think a contentious hard fork will only become increasingly difficult to pull off as the years go by, as stakeholders become increasingly entrenched in the existing rule system.

In terms of key security, I also have some hope that offline key storage will become more commonplace among regular users. We need better and cheaper hardware wallets, and we need better offline solutions from wallet developers. At this point, I think Electrum is the only desktop wallet with an intuitive offline wallet UI. That's pretty disappointing, but it's not a permanent limitation. Wallet UX in general is still holding Bitcoin back. This stuff takes time.

Well instead of worrying about the danger of PayPal holding a few billion worth of btc if they have that much. The true fear is governments copying Norway's move of putting some BTC into the entire nations retirement fund.

Norway is small under 6 million and it is only 2 dollars per person so well under 20 million.

Pick the UK with 66 million make it 100 per person and you are at 6.6 billion

Better yet Pick the EuroPean union 450 million add 1% vat to the whole union sink it into a BTC fund.

See where I am going. Adaption or adoption of BTC big time.

The upside of Paypal is it may have influenced Norway to invest in BTC for its pension fund. The upside of Graystone buying a lot of coins may have been a factor keep this up and maybe just maybe we see a dozen countries adding btc into its longterm holdings.

Many talk about 1 dollar satoshi's which is a 10,000,000 bitcoin.  Paypal Norway Gray-stone so dare I say Singapore and UK along with Italy in 2021. With more to follow in 2022.

This can be really bad for the future of Bitcoin. In 2017 Bitcoin community defended itself from the SegWit2x attack by clearly signalling that the users won't recognize the fork as new Bitcoin. But if in the future majority of Bitcoin users will only own custodial Bitcoin and won't know anything about the technicals of Bitcoin, it would be easy to hard-fork the network if miners will be onboard.

You should be careful counting your "unrealized" gains. Until you sell and have the cash out of the asset you should never really count on it. Bitcoin is currently up, but over the last couple months it has been very turbulent and as we saw last time - when it chooses to tank, it will drop very quickly and it is very possible to lose 20% within less than a day. Depending on the amount you have invested and when you started, it might be worth banking a little.

Sadly, this may apply to most people, at least until offline key storage is the norm. Too many people are prone to surfing the internet insecurely and downloading files on the same PC their wallets are on. When I tell people IRL they should have a dedicated offline device or hardware wallet, they look at me like I'm crazy. Most newbies aren't properly securing their wallets, and I honestly wonder sometimes how many ever will.

In a sense, Paypal/Paxos should be more secure than a typical exchange as well since they don't process customer withdrawals. That drastically cuts down on the frequency that private keys are handled and removes the need to ever use hot wallets.

There seems to be no special feature of Paypal's Bitcoin that would convince a lot of Bitcoin supporters to make their purchases there. On the contrary, there are a lot of reasons why they should not make the purchases there.

In my mind, Paypal's Bitcoin is especially tailored for newbies in the market who haven't been sufficiently informed yet as to the basics of Bitcoin and how it is to be truly owned and kept safely.

I've seen so many people here saying "don't use custodial services, they will report you to IRS". Do they plan to not pay tax on their Bitcoin gains? IMO that's an extremely risky thing to do in the US, especially if we talk about big amounts - there's a very high chance that they will uncover it eventually and slap you with such a big fine on top of what you owe, that you'll regret not reporting it yourself.


If you're an active PayPal user and a Bitcoiner, I see no problems with converting your PayPal balance to BTC. But if you're not a PayPal user, and you want to get into Bitcoin through PayPal, this is not optimal. I think it's only good for those who'd have higher chance of losing coins in their own wallets than losing because of PayPal.

That's what I was aiming at, don't sell till they enable real coin withdrawals.


I don't think they even need to run this scheme, Paypal has some serious fees, and BTC will not be the exception, yet they will make a lot of money, why risk not only these but their entire company and getting involved in this? Indeed Paxos might be cheating them behind their back and feeding false information but again, why would they do this, any financial gain is clearly outweighed looking at the consequences.
Indeed a hack might be something more serious but I still haven't heard of a serious cold wallet hack from a custodian, a real hack not an inside job.


The story of the BMW 8-series 

They have a Bitlicense, which requires 100% reserves. Not a guarantee of anything obviously, but they appear to be doing everything very by the book. I'd be much more worried about a hack than intentional fractional reserve.

Honestly, it's pretty cool to see "Your crypto" in my Paypal dashboard. Not cool enough that I'm going to load up my Paypal account, but if I ever have some cash on there, I'll buy some Bitcoin IOUs.

I like it.  Not for serious holdings, but for what you seem to be doing.  I did this in Robinhood back in the day...

If it turns out they are fractional?  Then I would frown on it.  But if they are actually custodying BTC then yeah... doing something small to help make them successful is not a bad idea.

And if they chose to have a fractional BTC reserve?  It would very possibly be their undoing.

_edit_ LOL.  I just looked at my Robinhood monies.  I bought it back when they first went live with synthetic BTC.  It's up like 400% heh.  Hopefully you see the same thing in Paypal.

I think its ok on the side for a fun hold of small amount of funds.   Say put it this way, you have a wallet existing with BTC in there, you can sell from there any time as usual.   What you could do is transfer spare change from paypal type sales into BTC and then sell the larger amount from your wallet if you wanted to and in this way you are neutral overall.
   I believe I read Paypal will eventually allow sales to be settled in BTC, otherwise yea its a funny thing.   If crypto ends up purely speculative then we can be sure it wont survive, the real hard line price is matched to actual trades occurring and settled by Bitcoin.    Always we are going to see a froth BTC price settled on top of the hard line Bitcoin, both can be rising but imo we'll always fall back to the less speculative pricing.

You are no worse then all the gold coin collectors.   I got some gold coin just for fun over a decade ago, it doesn't do anything.   I've gained tons of money on it, its doubled in price for me but its kinda silly because the utility of a lump of metal doing nothing is limited and I dont want BTC to be a do nothing theoretical idea.   Im not negative on gold, it has an ironic position in an economy but I think BTC will lose to gold for this placing (or any other solid element) because its virtual, BTC has to be used, efficient and enabling business to occur or I stop being bullish tbh.

Would be nice to see more countries do this move.  Very likely better than PayPal, but I live in the USA so I put around 250 and 170 into PayPal accounts. As it is a mainstream move.

Would I ever consider putting in 1 btc to each account no. Even if I got lucky and solo mined 2 blocks or so. Paypal won't see much of my money/coin.

it only makes sense for those who have funds on paypal and have no plans on using those funds, so keeping it in form of "bitocoin IOU" is better than keeping it in form of "USD IOU" on paypal. because at the very least you can gain some profit on your USD IOUs.

as for taxation, it is on the profit you make and all the IRS stuff is inevitable when it comes to any US based centralized company that handles this kind of stuff so you should have already made peace with that kind of invasion.

It's fine in moderation. I just wouldn't let it comprise more than a couple % of my total stash. As long as we all know it's just a shitty bank account, with all that entails, it's fine. I would definitely report your taxes to the penny. I'm more paranoid about the CRA and IRS raiding Paypal's records than I am about Paxos getting hacked or something.


Those fees though. I know it's zero fees for a couple more weeks but, just saying.

We didn't get 4mb blocks because the idea of going back to Satoshi original size annoyed people, this on an international scale would be weird.

And $2 for every citizen who have an average gdp per capita of at least $40000, I'd call it innovation. What do they care if their $2 sinks or if it doesn't. Although pension schemes look like a way to trap peoples money for investment for 35 years so...

My point exactly you don't want BTC to go mainstream.






I supposed you are pissed off every Norway Citizen now has some BTC in their retirement account.

https://news.coingenius.ai/norway-grants-its-citizens-2-worth-of-bitcoins-through-the-countrys-oldest-pension-fund/

or will that be okay for you.

Is it too common or is it innovative?

You tell me.

I agree 100% on the need for safe and secure mainstream, branded custodial services to facilitate consumer adoption. For most, the soft wallet user experience has been lacking for over a decade and has no doubt been responsible for countless coins being lost or burned, and certainly dissuaded many from engaging with crypto further.

But I do not believe that I need to promote adoption by supporting the likes of Paypal, who change their terms on a whim akin to Google or FB. Imagine the poor folks who will have their "crypto" frozen in the future due to some nonsensical policy. Sure, they'll get access to it eventually but will suffer undue stress in the interim. I have more faith in Gemini or Fidelity to get this right.

As for myself, having lived through enough hardware and exchange scams over the years, there's just no way I would consider leaving substantial coin with anybody but myself.

This old school guy says NYK, NYC.

Buying Bitcoin is not a taxable event. Selling it and converting to fiat is. That's why I make sure to always sell my coins FIFO, so I'm only owing long term capital gains.

Playing the devil advocate right now, but legally speaking, if you would have done this on Coinbase for example, wound't you still be liable for the same taxes? Or on any exchange? Of course, buying and selling at an ATM or P2P would have given you some privacy but still from a legal point of view that would be tax evasion, right? I'm not talking about what's moral or views on it but strictly legally! So, you do it with PPBTC or withBTC  at Kraken it's the same in the end, right?


Or, a solution to the above conundrum, hold till they will eventually let you withdraw real coins to your wallet, even if for some the average life expectancy often loses when it comes to good things getting implemented. If it took Coinbse 3 years to batch transactions we could assume 30 for Paypal real crypto withdrawals.


There is no need to argue, for a lot of people somebody else storing their coins is a better solution, guys like:
Twitter hack: Exchange 'blocked 1,000 Bitcoin transactions'

And at this point, I can say for sure that these services have just one way to go in terms of coins held, up!!! Of course, there will be thousands like us storing our coins in our own wallets but millions won't.

I don't ever use Paypal, but the fact is that for mass adoption most people are just going to end up letting a third party, like paypal or their bank or their investment firm, custody their bitcoin, no different than how most casual bitcoin owners (in the US) just bought and keep theirs on Coinbase or perhaps some other exchange. Paypal or in a bank makes it easy and convenient for them to spend, and investment firm that they trust makes it easy for them to invest and not worry about it (though I would assume these sorts of companies will get insurance for the bitcoin they hold, otherwise its gonna be hard to build trust).

Though the tax rules on Bitcoin make actually spending it a huge headache so until that happens there is not reason to keep it in an account that allows you to spend it easily.

I'll stick to holding my own bitcoin, but for the majority of consumers out there custody from paypal and other institutions will just make more sense for them. I would even argue that having these third party custodians is GOOD. That's right, good. Because it increases adoption, and likely a small percentage of those people will then be interested enough in actually learning about Bitcoin and taking advantage of its features beyond price appreciation. Also for using it as a currency, well, Bitcoin is simply unusable on a mass scale cuz of its block size bottleneck, so unless Lightning Network takes off and is easy to use and its tradeoffs are worth it, 3rd parties will allow vastly more usage (and therefore ownership) of Bitcoin to take place because they can just batch tons of transactions together and decrease the data going into the blockchain. The hardcore crypto enthusiasts will hate this idea, but it will in fact improve usability and adoption of Bitcoin by a huge amount.

I mean considering that specific company were going on about how they'd block accounts involved in it then I think it's pretty reasonable not to consider them trustworthy. Unless you've read, saved and printed your copy of the terms and service and read it all the way through to see what you're entitled to if they have another mood swing I'd do nothing with the.

I don't want mainstream adoption, I want INNOVATION. I don't want to experience a chapter in the middle of a long book I want its sequel.


"land of the free" more like land of the fee (pun creds to my autocorrect there).

Yeah im no longer annoyed at my 10% tax bill anymore...

and your are exactly the flaw in adoption that many many many many many old school people have.

As the Donald would say sad so very sad.

Just toss some more sand in the wheels of adoption.

I will not buy through Paypal. I do not need custodial services, and certainly not with an irrational behemoth

And no to the dildo too

It's considered normal income & uses the normal income tax rate. Federally it's anywhere from 10% to 37% marginal depending on your income. Then there's state income taxes added on, which can be anything from 0% (Washington) to 13.3% (California).

(I am not a CPA, etc)

Short term capital gains can get up to 37% PA, if you max the tax bracket.

I don't really use PayPal that much, but if you have some bucks sitting in the account I don't see why you shouldn't buy PPBTC instead of losing the purchase power of your money. This is for the situation you are too lazy to transfer the money out of your account and buy tangible BTC from a regular exchange and transfer them to your personal custody.

I am not aware of the tax rate on short-term capital gains in the United States. Is it 30-40%?

bob you a man after my own heart and soul.

I have two paypal accounts with about

250 in btc
175 in btc.

my feeling are this all members of bitcointalk.org that are legally allowed to buy btc on paypal

should.

obviously it does not need to be 1% of your btc it can be lower.

to not buy it when you legally can simply means you do not want btc to be mainstream.

jackg is correct in that it is not the same as having coin stored  in a bitcore wallet.

but i have been at this for 8 years. i have read  adoption adoption adoption.

and now i read dozens of bitcointalk  members speak against owning paypal btc.

i would give them twenty lashes with a flaccid green dildo for each and every time they say they wont buy it.

😯

From what I remember funds stored in paypal aren't insured like they are in a bank account. It shouldn't be used to store anything that you aren't happy losing.

Also if you can't transfer it out then that looks very shady, even if it is now physically backed. And everything you buy from them is giving them a profit if they already had reserves you're buying. There must be a reason they're doing it now 🤔.

So, in the course of doing everyday stuff, I use Paypal occasionally, which means I hold a cash balance with them.

I have started buying small chunks of PPBTC, and having them holding it in custody.

So far, it's been way profitable for me (unrealized), but I'm fully aware of the tax implications involved with selling PPBTC (Already had to sell off a sliver of PPBTC, and was forced to enter my SSN to continue. I see what you did there PayPal. Har har IRS. That $25 was sold at a loss !!)

Anyway, what are your thoughts on buying PPBTC ? I believe it's fully degenerate, mostly due to the fact you cannot transfer PPBTC out to your own custody.

The only way I'm rationalizing it right now, is whatever PPBTC I'm scooping, aren't going to be sold for at least 365 days after they are purchased, so I'm at least being taxed at long-term capital gains.

Thoughts ? Let's have a PPBTC catharsis thread.