It has been observed that people generally do not know a lot about Bitcoins, although it has been over ten years since they have been introduced. However, still, the general level of awareness about bitcoins is dismally low.
Purchasing bitcoins is a straightforward process, but because people do not know much about it, it seems difficult and complicated. So we shall in this article try to simplify it for the ordinary person because literally, anyone can purchase bitcoins.
There are a few prerequisites that need to be completed before one can purchase bitcoins.
The first prerequisite is to have a bitcoin wallet. A bitcoin wallet is where your cryptocurrency or your bitcoins will be stored. You store your cash in your physical wallet, right? Similarly, you will need a bitcoin wallet to hold your bitcoins. Now bitcoin wallets come in different forms. If you are a beginner, then you can do with an online wallet that is offered by many websites such as Coinbase. You will simply need to log into a website, and then through a simple process, the site will generate a bitcoin wallet for you.
If you need bitcoins for daily transactions, then you will be better off with a mobile wallet app that you can have on your phone, and then you can use it to carry out your daily transactions. If you are looking for a more secure option, then you can go for a hard wallet that comes in the form of a flash drive. It is a very safe way to keep your bitcoins however, the downside is that hard wallets are vulnerable to theft and risk of loss.
Bank Account or PayPal Account
The second thing that you will need is a bank account. Even if you intend to buy through PayPal, you will still require a bank account because your bank account will need to be connected with your PayPal account. Ideally, with a bank account, you should also have a credit or a debit card.
With a bank account, you will also need to have a PayPal account. For the PayPal account first you should check if the country you live in works with PayPal or not. There are quite a few countries in South Asia and Africa that do not support PayPal.
If you live in a country that supports PayPal, then you can set up your account. You will need to connect your bank account with your PayPal account so that you can transfer your funds. Once you have connected your bank account to PayPal and your account has been activated by PayPal to carry out transactions, now you can proceed to the actual process of using your PayPal to buying bitcoins.
You will need to transfer your funds from your bank account to your PayPal first. Transfer the number of funds that you want to use to buy the bitcoins.
Find A Good Exchange
The next step is to look for places that you can use to buy bitcoins through your PayPal account. Now the thing is that there aren`t a lot of platforms that offer PayPal as a payment option for purchasing bitcoins.
The following two paragraphs have been taken from PayPal FAQs:
“The reason is that PayPal has a chargeback policy on purchases made through credit cards to protect the buyers from risk of fraud or nonperformance of the contract on part of the sellers. A buyer makes a purchase but believes that the seller failed to fulfill their side of the agreement (for example, they did not ship the item, shipped an item that was very different from the seller’s description, or the item was damaged when the buyer received it).
All sellers who accept credit card payments run the risk of being liable for chargebacks. Chargebacks are among the unfortunate costs of doing business. Many sellers factor this cost into their business risk model.”
For this reason, therefore, many bitcoin exchanges refrain from using PayPal as a payment option because it adds more risk and there have been some instances in the past. Bitcoins are susceptible to this because once a transaction has been executed on the blockchain, it cannot be reversed. So if a Buyer files for a claim then the seller will have no way to prove that they have fulfilled their part of the transaction.
However, some platforms use PayPal as a payment option. There are a select number of exchanges that will accept PayPal as a payment or funding method. Read this to learn more about them.
Coinbase is perhaps the most well-known bitcoin exchange, unfortunately, at present, it does not offer PayPal as a payment option to purchase bitcoins but it does offer PayPal as a payment option for bitcoin sellers to receive their payments. So as far as Coinbase is concerned, it gives bitcoin to PayPal convertibility and not the other way round.
eToro is a bitcoin trading platform, and it provides the facility of using PayPal to purchase bitcoins. It must, however, be kept in mind that eToro is a bitcoin trading platform and not an exchange, so you cannot use your bitcoins to carry out transactions instead, the bitcoins purchase through eToro can only be used for trading. So if you use eToro, then you will be exposed to the price movements of bitcoins, but you will not be able to use your bitcoins according to your wish.
Localbitcoins is a P2P platform that connects bitcoin buyers with bitcoin sellers, and it offers the facility to pay through PayPal. Buyers will, however, need to look for sellers who are willing to use PayPal. Care must be taken because the risk of fraud on P2P sites is usually higher.
Paxful is another P2P platform that allows users to purchase bitcoins through PayPal. Apart from this, other platforms will enable PayPal as a payment option, so you will need to carry out your due diligence before choosing the platform of your choice.
Hopefully, this guide was helpful enough to make you learn the process of buying bitcoins through PayPal.