Less than a year ago, bitcoin filled all the headlines, but after its bust, the media coverage has significantly declined. However, there is still some interest in this cryptocurrency and some analysts believe it might trade higher again. If you’re interested in spending your cash to buy bitcoin, there are a bunch of ways to do it and they all carry some risks, not to mention they also have different transaction costs.
Almost 250 million users use PayPal, so it’s understandable that people with a PayPal account might want to use it to buy bitcoins. PayPal might see cryptocurrencies as competition, though, and PayPal uses chargebacks to protect its customers. This feature makes bitcoin trading complicated because some buyers used it to defraud sellers by claiming that they have never.
Table of contents [Hide]
Here’s the deal: buying bitcoin with PayPal
You can’t use bitcoin exchanges like Kraken to buy bitcoin with PayPal. Trading bitcoins is irreversible, but with PayPal, exchanges would become open to chargebacks.
They would also have to have a PayPal account, which means that exchanges would have to meet certain requirements set by the online payment service. To buy bitcoin with PayPal you have to consider other options, such as LocalBitcoins, Paxful, LakeBTC, and VirWox.
How to buy using PayPal on LocalBitcoins
On this peer-to-peer exchange, you can find traders who own bitcoins and are willing to sell them with PayPal as a payment method.
Step 1: You first need to open an account at LocalBitcoins.
Step 2: After you open an account, you can filter PayPal as a payment method.
Step 3: Choose a seller you want to trade with. Next to the seller’s username, you can find the amount he is willing to sell and all the available traders are listed by the asking price.
Step 4: It is very important to check the seller’s feedback, verified credentials, the number of blocks and other security checks to make sure that she or he wasn’t involved with fraud in the past.
Step 5: When you have found a seller you can trust, enter the amount you wish to buy and click the “send request” button.
Step 6: After that, you have to make the payment and confirm the payment. LocalBitcoins uses escrow and bitcoins are held in escrow for 3 hours.
How to buy using PayPal on Paxful
Paxful is another peer-to-peer exchange.
Step 1: You can create an account on Paxful.
Step 2: After that, you have to find a seller and check the terms of the sale.
Step 3: If the terms are acceptable for you and you make up your mind to make a purchase, click the “buy” button and Paxful connects you directly to the seller, with whom you have to negotiate the transaction details.
Step 4: When you send the payment, wait for the seller to release bitcoins. Paxful also uses escrow to protect both buyers and sellers.
How to buy using PayPal on LakeBTC
LakeBTC is based in Shangai, China and it supports users from the U.S., excluding the state of New York.
Step 1: To create an account, you simply need to submit your email address and password. A verification process is necessary only for traders who want to use currencies like USD to buy bitcoins.
Step 2: You can deposit money via PayPal, but LakeBTC might hold the deposit for some time as a precaution.
How to buy using PayPal on VirWox
VirWox uses Linden Dollars (SLL), which is a currency used in a video game called “Second Life”.
Step 1: Open and verify your account on their website.
Step 2: you need to deposit money from your PayPal account.
Step 3: Then you have to purchase Linden Dollars, which you can use to buy bitcoins on VirWox exchange.
If you are determined to use PayPal, the safest way might be VirWox, but it is not the cheapest because you’ll rack up transaction costs when you buy Linden Dollars, as well as when you exchange them for bitcoins. Paxful and LocalBitcoins are cheaper options than VirWox, but you’ll need to search for sellers willing to accept PayPal.
Also, check the seller to avoid fraud.
Transaction costs are also high for international traders on LakeBTC. It is based in Shangai, China, so international traders have to pay higher fees for deposits. Using PayPal is definitely not the best way to buy bitcoins. There are cheaper and more secure ways out there to buy the cryptocurrency, including a simple wire transfer with one of the established exchanges.
Benzinga's #1 Breakout Stock Every Month
Looking for stocks that are about to breakout for gains of 10%, 15%, even 20% potentially or more? The only problem is finding these stocks takes hours per day. Fortunately, Benzinga's Breakout Opportunity Newsletter that could potentially break out each and every month. You can today with this special offer: