- Payment platform giant Venmo is now allowing users to buy and sell crypto on their platform.
- According to sources, it will be “widely” available in the next month.
According to Cointelegraph.com, Venmo will now allow users to buy Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. While it’s neat that these mainstream and large corporations are bringing crypto to the masses, there are serious issues with how they are going about it. For example, when you buy Bitcoin on PayPal, you can’t send your Bitcoin to any other crypto Wallet. It has to remain on your PayPal. So it’s a place where you can only hold crypto.
So, say you buy some Ethereum on PayPal. Now, you want to trade it for some Polkadot. How do you do this on PayPal? You can’t. You can’t even send it to a CEX (centralized exchange) like Coinbase or Kraken. You would have to sell your Ethereum on PayPal then buy it again on a CEX – only then would you able able to trade your Ethereum for another type of crypto.
You don’t even get an address to have crypto sent to PayPal. Basically, the only use to buying crypto on PayPal would be if you intend to hold it for a long period of time. But it’s essentially the worst place to buy crypto because you have no freedom of moving it around as you wish – like you would if you were to purchase Ethereum on Trust Wallet or MetaMask, for example. As Venmo is owned by PayPal, it will likely be restricted also.
Introducing crypto on mainstream platforms like Venmo sounds exciting, but it could give people who are new to crypto a bad experience and make them salty. Imagine being new to the crypto space. You’re thrilled to finally purchase your first Bitcoin on PayPal or Venmo – but you find out that you can’t send it to your friend, take it off the platform or store it in a wallet of your own personal choice. Very disappointing, considering that the attractive aspect of crypto is the ability to be your own bank and not face regulations.
As a cryptocurrency holder, you want to be able to send Bitcoin to anyone on the planet without first having permission from a centralized authority. Furthermore, you want to be able to earn yields and stake rewards on the cryptos you own. PayPal and Venmo do not offer this freedom to its users. So, the way that large corporations like PayPal are introducing crypto to the masses are in a way that doesn’t mirror what most involved in the crypto and blockchain spaces care most about – decentralization and privacy.
People don’t want someone else in charge of where you can and can’t store your crypto. For which reason the best place to purchase crypto is on any CEX like Kraken, Coinbase, or Binance. Then you can send any crypto to any wallet you desire.
One very careful tip for people new to crypto: You must ensure you are sending your funds to the correct wallet. For example, you don’t want to send Binance Coin to your MetaMask wallet. MetaMask is typically used for ERC20 tokens. Binance Coin is not an ERC20 token. And ERC20 token is any cryptocurrency written as a smart contract on the Ethereum network. Binance, like Ethereum, has its own smart contract system. So if you send a Binance Coin to an Ethereum address, you might lose your crypto. Often times, the transaction will fail and your coins will reappear in your wallet. But don’t take the chance. Always make sure you do your research and know what you’re doing.
Please note that this article is not intended as financial advice. Always do your own research before buying any digital currency. All products mentioned in this article are for educational purposes only, and in no way is Blockzeit representing or marketing any companies mentioned in this article.
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.