Bitcoin today, has gained popularity worldwide and has introduced blockchain technology in the financial institutes, IT enterprises and several other sectors. The Bitcoin blockchain is currently going through several development phases, and many companies and institutions are implementing the technology in their system. There are different ways in which Bitcoin can be earned or bought; through faucets, credit cards, debit cards as well as PayPal. Bitcoin can also be earned through trading.
PayPal, a modern medium of payment in the e-commerce market has reached all corners of the world. Now, PayPal is moving into the cryptocurrency market where you can buy Bitcoin through PayPal. However, in most cases till now you will not be able to directly buy Bitcoin using PayPal from the cryptocurrency exchanges. The advantage is that PayPal does not require the buyer to set up mining equipment, create accounts on the exchanges or go through a verification process. This seems to be a ‘perfect’ way to acquire Bitcoin for casual investors.
The Indirect Way of Buying Bitcoin through PayPal
As stated, there is no direct way of buying Bitcoin with payment through PayPal. However, there are some ways to work around this problem and some of the online platforms allow Bitcoin purchase with PayPal. One good reason for indirect purchase of Bitcoin through PayPal is that Bitcoin does not allow chargebacks. Also, Bitcoin accounts are constantly targeted by scammers and hackers and this indirect system of purchase will prevent PayPal accounts being endangered by these hackers. Another thing is that PayPal payments cannot be reversed unlike Bitcoin.
You will need to go through certain steps to successfully buy Bitcoin through PayPal. Some of the crypto exchanges may allow such a purchase but they usually require the buyer to open a user account and wait till the verifications are done. PayPal approves of the indirect ways of buying Bitcoin rather than the direct method.
Where to Buy Bitcoin from using PayPal?
The PayPal system allows Bitcoin purchases by using Second Life Lindens or SLLs. Due to this factor many exchanges have come up that offer SLL services. Among them VirWox stands out. However, these exchanges do not work like general cryptocurrency exchanges. VirWox rather offers the Second Life game as a medium to purchase in-game collectibles. PayPal accepts the game and creates a grey zone that uses in-game money to buy Bitcoin. Simple speaking, you can buy Second Life Lindens and then sell them for Bitcoin. Even if the process seems complex, it is actually quite easy once you understand it. The total fees associated with the process is near about 10%. The process of buying Bitcoin through VirWox using PayPal is given below in 4 simple steps:
- You will first have to deposit US Dollars or Euros to the VirWox exchange through PayPal.
- You need to buy Second Life Lindens or SLL with the deposited Euro or USD.
- Buy Bitcoin in exchange for Second Life Lindens.
- Move the purchased Bitcoin to your Bitcoin wallet.
It is a reliable way of buying Bitcoin even though you may have to wait for one or two days for depositing money through PayPal after opening an account on VirWox. Once you make a deposit you do not need to wait to make deposits in future. At first the buying limit is $90 per day and $270 per month but it increases with time. Make sure to open a Bitcoin wallet before making any purchase.
LocalBitcoins is another online platform in the market that allows purchase of Bitcoin through PayPal. LocalBitcoins is a popular pioneering peer-to-peer exchange that was established in 2012. You will be able to buy Bitcoin from LocalBitcoins using PayPal from anywhere other than Germany and New York. The intuitive interface of LocalBitcoins requires the buyer to create an account by providing their email address. The platform will allow you to select the any seller from the list. You need to add the amount you want to purchase and select PayPal as the medium of payment. The platform will direct you to a page where you will be able to see the limits and the trading conditions as given by the seller. Some of the sellers may require verification and you will probably need to show your ID and provide your phone number. A feedback section on the seller is accessible from LocalBitcoins that will help you to check out the history of the seller’s profile and decide upon the seller. There is a premium charge of nearly 20%, higher than many other local Bitcoin exchange rates. Moreover, 1% fee is taken by the site from the sellers. The advantage is that LocalBitcoins does not put any limit on the amount and the number of transactions done between the seller and the buyer.
When seen from the privacy perspective, LocalBitcoins is a safe site and maintains anonymity of the buyer. You also do not need to link any bank account as it is a P2P exchange. Other than being encrypted with HTTPS protocol, LocalBitcoins offers Login Guard as an added layer of protection. There is a two-factor authentication system (through email and SMS) in place.
Operating since 2015, Wirex is a debit card that supports fiat money and banking services. Other than the US, you can buy Bitcoin through Wirex using PayPal from any country. You need to select the type of card (virtual or physical) from the ‘generate new card’ option and then link it to your PayPal account. There is a verification step and it requires to deposit at least $3 in your PayPal account. Then, PayPal will be able to process the fee. After this process, you will see a 4-digit PIN on your Wirex account, next to your transaction. You will be able to draw funds from your PayPal account to the Wirex account and use it to buy Bitcoin. Nothing is charged during activation of the card but delivery of the physical card will be charged. It is a little higher than the delivery of the virtual card. The maximum single transaction value per day is 500 USD, 500 EUR and 400 GBP.
Wirex demands ID and address proof verification from the buyers as it adheres to KYC and AML regulations. The verification documents are submitted to the regulators and usually kept for at least 6 years. So when you will buy Bitcoin, you do not need to go through further verification process.
Paxful, LocalBitcoins is a peer-to-peer exchange and offers its services worldwide. Among other methods of buying Bitcoin, Paxful accepts PayPal transactions. The Bitcoin buyers can directly buy the cryptocurrency as they enter the website or can purchase after registration. After registration, the buyer will find options asking them to insert the amount and the payment method. Paxful allows the buyers to deposit in local currency through PayPal, and they can also choose the seller. Sometimes, if you are undecided, Paxful will choose the seller for you. Paxful offers a chat option through which you can negotiate with the seller after the amount and the seller have been decided. You will have to mark ‘paid’ after completing the payment process. However, there is a 30-minute time limit for closing the deal or else you will have to strike a new deal to purchase Bitcoin using PayPal. The good news for Bitcoin buyers is that Paxful does not charge anything from them, but from the sellers a mere 1%. The sellers also have to pay the Bitcoin network fee. There is no set limit on the amount of Bitcoin purchased.
In regards to privacy, two links will be sent to email address provided by you during registration. One link will lead you to the email verification process while the other is the pathway for two-factor authentication, done through SMS and Google Authenticator. Secured by Comodo, Paxful includes the 256-bit SSL encryption.
Even though eToro offers Bitcoin purchase using PayPal, it does not allow withdrawal of Bitcoin through PayPal. Neither can you send Bitcoin to another address through PayPal. eToro does not offer this service to the US citizens. When buying Bitcoin though PayPal, the minimum single deposit amount is $50 and the maximum single deposit is $5000. On the other hand, the maximum deposit limit on a monthly basis is $10000. You will simply need to login to the eToro website and register your account. After linking your PayPal account to the eToro account, you can start the process of buying Bitcoin.
The above-mentioned online platforms offer a secured way of buying Bitcoin using PayPal and the fee depends on the exchange used and chosen seller in most cases. It is best to secure a Bitcoin wallet first before purchasing Bitcoin using PayPal from one of these online platforms. You can use online wallet services, store Bitcoin on your personal computer or use a cold storage method. Keep the recovery seed or private key a secret to prevent any hack. All the Bitcoin purchased using PayPal will finally be stored in the wallet.