Topic: What are the potential side effects of corporations selling fake crypto? - page 2. (Read 573 times)

I also agreed that the PayPal company can't possibly manipulate a trillion dollars market but I was actually talking about the moment when the market hasn't reach $30,000 price if you follow rumors within the cryptocurrency communities (on this forum, Reddit, etc) some people believe Paypal's trading activities impact the dump in price that happens then.

Ofcourse.
It shouldn't be "full cashless" though. People should have the right to own physical currencies whether on centralized or decentralized system. There are lots of benefit in the use of physical currency for society. Virtual currency could easily leave a society vulnerable to tyranny for example.

Anyway, I don't believe every society will go full cashless. It will be imposed on others or they will be decieved into accepting it.

This is true! When it comes to manipulation side of things then the ownership of a certain company or industry wont really be that enough when it comes to manipulation of prices.
Unless if this do talk about several numbers of big holders then with some involvement of unknown whales which do held more than coins than them that could possibly
change off the entire one.We cant really tell on what could possibly happen behind the curtains but knowing that they can do all sort of things as long they would able
to benefit them.About manipulation then they can do it but wont really be giving out significant effect.

If they were willing to manipulate markets using real BTC, market cap would not matter at all. Liquidity is pretty much the main factor that matters when it comes to influencing markets. But if they wanted to manipulate markets using counterfeit (non-existent) BTC, all they have to do is just take off the limit for BTC purchases/sales. At that point, there is an infinite counterfeit BTC going in and out of PayPal's system making Bitcoin's scarcity artificially vanish.

You mean, they might be short selling those fake BTC, knowing that they can manipulate the market to make the price go down? That's an interesting point, but does PayPal have resources to manipulate a market with $1 trillion cap? I personally don't think so.

In principle it is the same that they to do gold, we know there is a limited supply of gold but governments increase the supply of ‘gold’ by selling paper gold, which is nothing but a piece of paper that supposedly represents real gold but that is not backed by it, this keeps the price of gold depressed as there is way more paper gold than real gold, if governments and businesses like PayPal begin to offer paper bitcoin that you can never withdraw but that tracks the price of bitcoin then they can increase the supply and slowdown the growth of the price of bitcoin as people buy it as if it is the real thing and artificially increases its supply.

How can they manipulate something that is not part of the blockchain, their transaction is just their make up, with numbers not real I don't know how are they going to do that or are they capable of doing this, people might think it's illegal because it's not part of the blockchain or explorer but this is PayPal, which is a centralize corporation trying to be part of decentralized technology.

You make a good point but I believe they will have everything sorted out before they can plan to sell fake BTC (that's if they do just like USDT does) since they are also aware of the volatility of the market which I believe they can handle properly and they have to partner with Paxos (which handle the crypto while Paypal handles the fiat).

Even if SEC wasn't a threat, selling fake BTC would put PayPal  at risk of a big loss. What would you do, if people bought millions fake BTC on your platform, and then the price rises by 100%, and they want to exchange them back to USD? If BTC in your customers' accounts were backed by real BTC then no problem, you could sell BTC on the market at the high price and provide your customers with USD, but if they("BTC") were fake you would have to pay out the dividends from your own pocket,  which could lead to bankruptcy.

Unfortunately I think this is the greatest threat of services like that, they are framing bitcoin not as this revolutionary technology that is here to bring back some power back to the people, they are framing bitcoin in a way that makes it seem as yet another asset in which you can speculate in, obviously people like us know what's up but most people that only hear about bitcoin in the news only know about its price and how it can bring them profit but it is unlikely they know what it is and what is its function.

Yes, a full cashless centralized economy is very dangerous for individuals because there is no freedom for personal finances, whatever we have will be intervened by the authorities. The current Paypal policy is quite strange and there will be many suspicions from users of the platform if it is not immediately clarified. I'm sure, Paypal will change this policy until the many complaints that come to them.

The strange practice of not letting customers withdraw their coins sound worst than using fiat currencies on traditional banks. Atleast the banks allow people to withdraw their funds inform of physical currency like paper. Guess people will simply convert the "crypto" to fiat and withdraw them physically if they can't withdraw them to their crypto wallets outside of PayPal space.
By the way, this one the the reasons people should be suspicious of cashless economy, especially on centralized platforms.

I think you can say PayPal is offering cryptocurrency service just like the OTC but the only difference is that people can not withdraw or deposit their coins. Technically, they can sell fake coin but they know the consequences they will face by the SEC so they won't do that but there's the possibility that price of the market not to influence or be intact with the capital market price and circulation since they seem to offer OTC market and OTC price are always mute to life market.

At first, reading that one couldn't withdraw their BTC from PayPal, I thought "That couldn't be true!". But then I checked their official FAQ, and I saw these two things there:



Well, now I understand some concerns.

But let's discuss the following. If they were selling fake BTC to their customers on PayPal, wouldn't that affect the BTC price negatively, because a part of the demand would be covered by fake coins? Yet, the opposite is happening - the price is going up.

If you "withdraw" to USD, it's converting to fiat.. not withdrawing. Withdrawing is what you have mentioned in your second paragraph.

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Thanks to you all for your replies; quite interesting to see how many out there trust their guts with PayPal without ever questioning what they're actually selling or... if they're even selling anything. As some users here mentioned, if PayPal does not let you withdraw your coins, it means it is possible that they are not even selling you anything at all!

I'll take one hypothetical scenario: say a 3-letter agency decides to work with a large corporation on a plan to destroy the cryptocurrency economy. If we're talking a hypothetical collab between an agency and a corporation such as a bank, I'm quite sure the destruction of crypto economies is at the best interest for both parties.

3-letter agencies are known to doing classified operations that are in their interest; why would a fiat-threatening economy that they simply cannot control be let alone?

Therefore, the question is.. how hard is it really to sell a currency that does not exist? You pay me $47k in my personal wallet and I hand you out a piece of paper having "1 BTC" written on it. How do you know whether your 1 BTC truly exists or I sold you nothing for $47k?

This is a potentially threatening issue we may be confronting without even knowing it. I still find the ways Revolut and PayPal work as suspicious, but the fact that so many people really trust them and their way of "selling BTC" is very interesting to me.

I wish I could merit some posts, but I always remain out of merits and I already owe so many people some. Interesting read this topic is.

As others have sated both PayPal and Robinhood currently only allow for buying and selling but no transferring. As much as I absolutely depside PayPal and their scummy corrupt corporation, I highly doubt that they are manipulating things in this manner.  I think regulators would be able to catch this if they were trying to do so. Just my two satoshis anyhow.

Where you said that it can’t be withdrawn from their platform, I think the right word to use there is that you can’t send and receive. You can actually withdraw it on their platform and that’s by converting it to US dollar or any currency, before you can then send the money out or withdraw to bank.

What they do is that they don’t allow people to send out cryptocurrencies and you can’t also receive cryptocurrencies, unless you’re using their merchant services, you can then receive cryptocurrencies, but you still can’t send them out. And we can’t tell whether the coins we are buying are real or not. It’s up to you to decide whether you’re going to trust them or not, and if you happen not to trust them you can start making use of another exchange or wallet .

What paypal is doing is simply a version of what derivatives and CFD exchanges offer.

I personally think that this will not necessarily have a great impact on markets - Paypal would still have to comply with certain regulations that require them to hedge their positions, meaning that they can't simply create positions out of thin air to manipulate the market.

But at the same time, I am worried that people will miss the point of cryptocurrencies altogether - it is not primarily designed to be a speculative vehicle. But the way that Paypal and others are framing it eliminates the underlying technology of blockchain altogether, meaning that BTC is no longer transactional. That should be worrying but we can't do anything to stop private companies from offering these products.

If anyone is ever bored search engine keywords: paypal horror stories.

There are many paypal horror stories posted on the internet. Many stories of paypal canceling accounts for trivial reasons to confiscate the holdings of its clients.

If those stories are true, would it really matter much if paypal engaged in illicit activity? If the stories are true, they may have done so for years, without being held accountable or having their user base take action.

Perhaps a question we can ask is, what action can people reasonably take if paypal abuses its role.

PayPal has informed that they will be allowing the customers to withdraw the coins this year and there were reports that they purchased a large quantity of bitcoin directly from the miners and that is when the price started to rally if i remember correctly, if they are not allowing this then they will die off eventually as no one is going to spent money on numbers without the real coins.