Following a bitter hard fork battle with Bitcoin SV, Bitcoin Cash is surging. While Bitcoin SV was delisted by Binance, Bitcoin Cash saw a price increase of about 15 percent. Bitcoin Cash is growing at a rate—as of the writing of this article—greater than bitcoin and Ethereum, making the once-troubled coin an attractive portfolio add.
While there are more ways to buy Bitcoin Cash now than there was just four months ago, buying the coin without using a bank transfer or a credit/debit card remains challenging. For those that bemoan the idea of using bank products to buy a bankless currency, there are few valid solutions. Besides direct trade, the best solution available is PayPal.
This article will examine how one could buy Bitcoin Cash with PayPal and the challenges in using this payment option.
Why Use PayPal?
For those unfamiliar with the company, PayPal provides a fully digital payment platform for the buying and selling of services and goods that works with the traditional banking system but is separate and independent from it. In 2018, it was one of the largest non-bank payment rails, with more than 250 million active accounts.
Despite its similarities to “traditional” cryptocurrencies, PayPal does not play well with them. Despite recent relaxation on cryptocurrency buying, PayPal cannot be considered altcoin-friendly. This, in part, has to do with chargebacks, or the cancellation of a charge after the fact.
In the early years of bitcoin, several fraudsters opted to steal bitcoin using PayPal. They would place an exchange buy order for bitcoin using PayPal and would wait until the order went through and was confirmed. They would then—capitalizing on the irrevocability of bitcoin transactions—place a chargeback request into PayPal, asserting they never received the promised goods. PayPal had no way to confirm this, so they processed the chargeback, leaving the seller without his coins or the money for them.
This placed PayPal in an uncomfortable position of possible legal liability, which the company resolved by simply banning the purchasing of cryptocurrency. Since then, the company has forged some alliances with the cryptocurrency community, including the ability to withdraw funds from Coinbase and deposit it to PayPal. However, it is still not possible to directly buy coins on Coinbase using PayPal.
Using PayPal to buy cryptocurrency requires some additional steps. But, for those seeking to avoid bank interactions with their Bitcoin Cash buying, it may be worth the extra effort.
Buying Bitcoin Cash with PayPal
The means currently available to buy Bitcoin Cash with PayPal is via VirWox, through a lending platform such as xCoins, or peer-to-peer via a marketplace like LocalBitcoins and Paxful.
For this example, we will be looking at VirWox. For more details on the other options, please check out our guide on how to buy bitcoin with PayPal.
As stated above, it is not possible to buy any cryptocurrency with PayPal. However, VirWox offers a workaround by allowing users to buy Second Life Lindens or Linden dollars—the in-game currency for Second Life—with PayPal and then allowing the direct trading of SLLs for Bitcoin Cash.
If this sounds strange, it should be noted that VirWox—the Virtual World Exchange—started off as an exchange for in-game currencies. There is an active market for Linden dollars, with revenue from Second Life in-game businesses regularly being refunded to fiat using PayPal.
This is not a complicated process, but it does take a few steps. The transaction costs are also high.
Step 1: Start by logging into VirWox and setting up an account. Press “Not registered yet?” if this is the first time using this service. Follow the directions on the screen and click “register” when finished. Log in using the temporary password VirWox emailed to you within 24 hours to activate your account.
Step 2: Next, make a deposit using PayPal to the account. You will need to use a fiat currency—the United States Dollar, the Euro, the British Pound, or the Swiss Franc—here. Other currencies are available for an exchange fee.
Step 3: Once the deposit clears, go to the Exchange section or click on the trading pair that matches your deposit currency. Follow the on-screen instructions to complete the trade.
Step 4: With your SLLs purchased, you can go back to the Exchange section and click the SLL/BCH trading pair. Once you complete your conversion, you can provide your wallet address for your newly purchased Bitcoin Cash.
Besides being a less-than-straightforward way to buy Bitcoin Cash from PayPal, there is a 10 percent transaction fee. However, for those wishing to avoid bank interactions, it may be worth it.
Buying Bitcoin Cash with PayPal is expensive and challenging. It is not, however, impossible. If you are determined to use PayPal for your Bitcoin Cash purchasing, you will be able to benefit from PayPal’s purchasing protection and consistent record of safety. However, you must be aware of the pros and cons of any purchasing arrangement.
See Related Articles:
Stay ahead of all of your essential investment news and advice. Subscribe to the Bitcoin Market Journal newletter today.