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Whats the difference between Bitcoin and Paypal?

Whats the difference between Bitcoin and Paypal?

What makes Bitcoin any different than just being a new version of an old classic? What's wrong with Paypal anyways? In this video, shot in the Miami Wynwood ...

Transcription

What's up party people? Chris DeRose here, Community Director of the Counterparty Foundation. The question I'd like to answer in this video is "What's the difference between Bitcoin and PayPal?" I have been seen this question around a little bit from the people that are new to this space, and it's a really good question. At PayPal, for those who don't know, is I guess the internet's first quintessential bank and payment mechanism service. It was a company that was found in, I believe in the mid 90's. It was at first a companion to eBay primarily, and it was used for people to send U.S.

dollars to other users. It interface with your bank account and you set up a CH integration where you type in your card and your account number. Through the U.S. banking system, it would go ahead and pull money from one account and then put into another. It had its own money repository.

It was itself a bank. That is what PayPal is and how it started. Bitcoin is very, very different. Bitcoin is a protocol for managing scarcity. So in the same way that HTTP is a protocol for managing information, Bitcoin is a protocol for managing scarce resources. Now you've probably seen Bitcoin introduces a currency or as money.

Indeed, the currency and money is the lowest hanging fruit in this scarce resources moniker. There's nothing that is perhaps quintessentially more scarce than money. So for a lot of people, they saw Bitcoin as being just an alternative to PayPal. But even that right off the bat, there's a couple of reasons why it's very different. Even if you consider that yes, Bitcoin is used in so many ways, it is first off decentralized. So unlike PayPal where there's a company and there's a help desk and there's a whole bunch of operators, Bitcoin itself is just a protocol.

It's some computer code. It's a set of numbers, and it is all of these supporting algorithmic complexity in managing this sort of data. PayPal, again, is a centralized institution that is a company and it is incorporated. Other ways that Bitcoin is different right off the bat is that it doesn't necessarily use U.S. dollars.

In the Counterparty system, you do have the option of enabling a token with the name U.S. dollar and you can send U.S. dollars over the Bitcoin network. But that's kind of a 2.

0 thing and that's not even there yet. At the moment, what people will typically do when they want to send value is they go to Coinbase. So they go to Circle and they interface with their bank, they take money from their bank, they buy Bitcoin. They then take that Bitcoin and put on their cell phone or put it on the web browser on the computer, and then they go ahead and spend it at another company which could be again using Circle or it could be using Coinbase or using Bitpay to take that money back out into their bank account. So Bitcoin as a protocol is a really cool and neat new thing, unprecedented, major discovery major contribution to science. But PayPal is a very conventional thing.

It's just a payment processor. It's a lot like maybe MX or one of these types of things where it's another tool in the financial world to work with existing technology, so it's not a protocol or a platform or a movement. So I think that's the overall theme of the differences between the Bitcoin and PayPal. There is a lot of subtleties in the question. You can probably tell by some of the videos on the side, it is a lot of questions people have about Bitcoin. So you probably have some for yourself.

Why don't you look at my channel, see if I have answered it already? If you like my channel, subscribe to it. But if you don't see what you're looking for, then maybe you can ask me. I'm derosetech on Twitter, and you can email me at chris@chrisderose.com.