PayPal may not be the safe online banking solution it has been made out to be. Recent news over the PayPal-Seafile controversy found that the online payment company has reopened the account. Seafile, however, would rather move on without them. There have also been reports of PayPal getting more comfortable with the idea of bitcoin use. This could be dangerous for them and their customers.
PayPal Doesn’t Give a S**t About Your Business
The Seafile account hold was a big blow to the Dropbox competitor. They said they were pretty much cut off for not monitoring their customer files and data for anything illegal. PayPal simply said, “do this.” And when Seafile failed to jump, they were blacklisted. This led to Seafile offering their services for free until the account hold was lifted. That is scary for any small business or startup.
Opening Up to Bitcoin Use
Opening up to bitcoin use may be dangerous. Especially since bitcoins are not actually real. PayPal has partnered with Coinbase, a virtual currency wallet, and exchange. The relationship will let customers sell bitcoin and cash from their PayPal accounts. This may be more beneficial for bitcoin and not the online payment company.
Many regulators are against the use of bitcoin. The volatility of bitcoins comes with heavy warnings as a currency, as well as an investment. Tokyo-based company Mt. Gox left customers in the cold, unable to access their bitcoin accounts for absolutely no reason or explanation. And since it is not a real currency, what can you do?
There is No Accountability
Companies holding your bitcoin accounts in their hands don’t answer to anyone. There is no regulator or authority to protect your money and account. They can simply say “sorry,” leaving you with nothing. Seen in the case of Mt. Gox. With no accountability, PayPal and their new partner Coinbase can simply do whatever they want.
Experimental and Not Tangible
Joseph Borg, the director of the Alabama Securities Commission warned those looking to invest via bitcoin a very stern warning. He noted that they have no tangible value and not backed by any central banks. Bitcoins are an experimental concept and PayPal might need to take a second look at opening the dangers of bitcoin use.