Crypto is a computer-generated file designed to be a completely digital store of value that isn’t connected to anything tangible in the real world. Short for cryptocurrency, many believe crypto could one day be as commonly used as cash and credit, but as of the date of this article, this form of currency is not widely accepted yet and currently cannot be used as a way to pay or send money on financial platforms like PayPal. Rather than paper bills, crypto is counted in digital units or “tokens” that can be purchased and sold in fractions.
Crypto has grown significantly since the introduction of Bitcoin in 2009. But it’s still relatively young compared to centuries-old stock markets around the world. Volatility is part of the growing pains as the market reacts to each new development.
For the time being, cryptocurrencies aren’t regulated by governments or central authorities like federal regulatory agencies because they don’t belong to any nations, organizations, or private companies.
Most cryptos work on an ecosystem of computer programs running on thousands of devices around the world, known as blockchain technology. Since many of the most prominent blockchains are public, the information in these networks is protected using cryptography, or complex computer-generated code — this is what puts the encryption or “crypto” in cryptocurrency.
Every day, people around the world are developing new cryptos and apps to advance the technology. Some ideas are full of potential, some ideas don’t pan out. And because innovations affect the rate of adoption, each success and failure can have a strong impact on the entire crypto market.
Cryptocurrency: Getting started
Crypto, short for cryptocurrency, is a digital currency that you can buy and sell. The value of crypto will rise and fall — sometimes very quickly. We recommend doing your research and considering the risks before buying. You can buy fractions of crypto for as little as $1. It’s ok to start small and grow as you go. Crypto is considered volatile because of how much and how quickly its value can change. And while there’s potential for profit if your crypto goes up in value, you also face the risk of losing money if the value goes down. Here are some factors that may help to understand why crypto is volatile.
There are many platforms that provide you the opportunity to buy and sell a cryptocurrency, but I personally use Paypal. With PayPal, you can buy four different cryptos: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. You can also sell the crypto you buy on PayPal or hold it in your PayPal account. If you have a PayPal Cash account, all you need to do is confirm some account info during your first purchase. If you don’t have a PayPal Cash account, you can apply for one during your first purchase.
When buying and selling crypto, there is a transaction fee and a currency conversion spread, which is included in the exchange rate. You’ll see the transaction fee and final exchange rate before confirming any purchase or sale of crypto (See rates and fees at https://www.paypal.com/en/webapps/mpp/paypal-fees). There are no fees for holding crypto in your account. Since crypto is digital money, you’re essentially swapping one currency for another when you buy and sell it. The exchange rate tells you how much crypto or dollars you’ll get in the swap and refreshes often because the value of crypto is constantly changing.
Currently, you can only hold the crypto that you buy on PayPal in your account. Additionally, the crypto in your account cannot be transferred to other accounts on or off PayPal.
Will PayPal protect my crypto?
PayPal works 24/7 to prevent theft and fraud. If you suspect fraudulent activity on your account, please contact customer service by visiting https://www.paypal.com/us/smarthelp/home or call (888) 221-1161 immediately to report it and we’ll review your account activity.
What we can’t protect you from are losses that result from crypto prices going way down. Yes, crypto can be fun and exciting, but it’s also volatile, so we recommend doing your research and making decisions carefully.
Will I get a private key for the crypto I buy on PayPal?
You own the crypto you buy on PayPal but will not be provided with a private key. In case you’re wondering, a private key is a person’s secret code to access and manage their crypto. If lost, stolen, or even forgotten they can never get to their crypto again — pretty risky in its own right. As long as you can log in to your PayPal account, your crypto will always be at your fingertips.
Where does the money go when I sell my crypto?
The money goes directly to your PayPal Cash or PayPal Cash Plus balance where you can use it as you normally would.
How long does it take to receive money from selling crypto?
Usually, the money you receive from selling crypto will be available instantly in your PayPal Cash or PayPal Cash Plus balance. As with all transactions, crypto sales are subject to review and could be delayed or stopped if there’s an issue.