Joseph Young on PayPal and Bitcoin →

December 2, 2018

Joseph Young:

PayPal says its bank account withdrawal fee is $1, which is true. BUT, the conversion rate is where they get you. I received $1,000 this week from a friend. PayPal shows $955 as withdrawable amount. $45 fee for a $1,000 payment, while Bitcoin processes $194 million with $0.1

I really don’t understand why people think this is a good argument in favor of Bitcoin. In most cases, when A transfers $1,000 to B, it’s because B wants to be receive USD because fiat is stable and predictable. In Joseph’s example, I like to think of the $45 fee as a stability fee that cannot be beat by Bitcoin at the moment when considering the fact that most people don’t give a s*** about receiving BTC — most people want fiat.

$45 for a $1,000 transfer is a 4.5% fee. What are the chances of timing a Bitcoin transfer and trade to ensure a loss of less than 4.5%? In its current state, Bitcoin just doesn’t beat services like PayPal and Venmo for day-to-day payments. That won’t change until Bitcoin’s market cap is in the trillions.


Find me on Twitter, or email me.