Standing at $1.3 trillion, Bitcoin transactions have reached a higher value than PayPal’s in 2018. This means that more money has been passed between users of Bitcoin than users of PayPal. This is huge news for the industry, as it proves that cryptocurrency is, in fact, robust and valuable enough to beat conventional fiat platforms. Since the creation of Bitcoin, people have doubted whether this type of achievement could be reached, as they argued that the coin did not have the infrastructure to scale appropriately, but this would appear not to be true.
Types of Bitcoin transactions
There were two factors which allowed Bitcoin to surpass PayPal. The first was that Bitcoin transactions on exchanges were counted, not just direct transactions. This meant that when people bought or sold an asset on both crypto-to-fiat exchanges and crypto-to-crypto exchanges with Bitcoin, it got added to the statistics. Essentially, the regular act of trading raised the numbers. The second factor was that cryptocurrency as a whole has started to become both popular and well-known in the world beyond tech circles. This had a clear effect on how many Bitcoin transactions there were, as it meant that more people were willing to experiment with it.
Bitcoin and exchanges
Bitcoin is still the number one cryptocurrency offered by exchanges. Most platforms offer BTC as an option as default, of course with the exception of Ethereum-based decentralized exchanges which cannot run BTC. Even smaller and more obscure exchanges make it a priority to always have a reasonable quantity of Bitcoin ready for traders. This is not just because Bitcoin is popular, but because it is a household name. Most people’s first cryptocurrency investment involves Bitcoin. It is an industry-standard, so much that it is used as a marker for how well the market is doing as a whole.
While the significance of Bitcoin may change in the future, its presence right now is magnificent. In this sense, it is not surprising that Bitcoin could amass $1.3 trillion in transactions: it is instrumental to the industry. Bitcoin acts as the ultimate gateway into the world of altcoins too. The general process that new users take when delving into altcoins involves the buying of Bitcoin (from a crypto-to-fiat exchange), and then the subsequent selling of Bitcoin (on a crypto-to-crypto exchange) for their altcoin of choice. This method may sound cumbersome, but in many ways, it is the simplest in the current iteration of the cryptocurrency market.
It is no wonder that transactions got so high, numerous users switch between at least two exchanges to get the assets that they want. This is not meant to discredit Bitcoin’s achievement or to criticise people who do this, but rather just a means of trying to explain how Bitcoin dominated PayPal in this respect. It would be wrong to not count transactions to and from exchanges, as they are such a huge aspect of the ecosystem.
Bitcoin and the late 2017 bull market
We all know that the end of 2017 saw a rise in cryptocurrency like none other. Coins and tokens were reaching new all-time-highs on a near-daily basis for some weeks leading up to early January 2018. This crazy behavior allowed for crypto to get the recognition it deserved from televised media outlets and newspapers— and of course, Bitcoin was the face of it all. While it was by no means the only coin to rise in the bull market, Bitcoin was the coin receiving the most attention. Nowadays, people who do not engage much in crypto know how vast the market is, but the first coin they think of is still BTC.
If it wasn’t for the 2017/2018 bull market, then Bitcoin might not have hit this target. Statistics on CoinMarketCap even show that after the market dipped tremendously, the frequency of 24-hour volume stayed high. The market might have acted poorly, but it was not enough to deter people. A lot of this could be from the concept of buying low and selling high. During the dip, people tried to catch a falling knife— they attempted to guess the bottom of the bear market and subsequently buy cheap coins and tokens. This proved harder than expected, as the industry continued to fall for longer than people expected, and may even continue to fall again in September. This led to repeat buys, adding to Bitcoin transactions.
For many, PayPal is the rival
News that Bitcoin transactions beat PayPal is a major win for the industry. Many newer coins and tokens position themselves as direct opponents of PayPal, aiming to entirely replace it, so word of a cryptocurrency surpassing it brings hope to the market. Cryptos such as Request Network, OmiseGo, and Stellar have been laying the groundwork for a complete electronic payment overhaul.
The general idea behind positioning cryptocurrency against PayPal is because both services have such opposing ideologies. PayPal prides itself on being the harbinger of economic integrity, whereas cryptocurrency prides itself on being the harbinger of economic autonomy. While integrity and autonomy should not be opposites, the way PayPal tries to handle things means that the two are not currently living side-by-side. PayPal’s behavior towards integrity has come across as highly restrictive. One major example of this is how PayPal restricts the ability to buy medication. People also argue that PayPal’s methods regarding charge-backs are too relaxed, allowing for smaller merchants to get punished.
Cryptocurrency does not have either of these problems, as it allows for buyers to buy whatever they wish, and for sellers to protect themselves by not allowing charge-backs. This is the type of autonomy that people who support Bitcoin (and others) want on the internet. There was a time when PayPal was like this, but those days are long gone. This is why the news about Bitcoin transactions surpassing PayPal is so important right now.
Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.