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How to Buy Ethereum With PayPal

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Why buy Ethereum with PayPal: The Investment Opportunity

Blockchain technology has the potential to improve the standard of living across both developing and developed nations. Blockchain offers an unprecedented level of transparency and accountability to the corporations and individuals who use it, reducing inefficiencies and improving productivity across industries. Blockchains come in all shapes and sizes, from Bitcoin’s payment system to Ethereum’s “world computer”. Both of these blockchains are permissionless, meaning that anyone with an internet connection can access and interface with these systems. Bitcoin’s anonymous creator “Satoshi Nakamoto” pioneered the technology by detailing a peer to peer payment network in the now famous Bitcoin Whitepaper. 6 years later and with inspiration from Satoshi’s work, Ethereum was released with a goal to decentralize computation in a trustless way.

In a similar way to how Bitcoin removes expensive and inefficient banks as middlemen, Ethereum removes software companies. The current structure of the internet is highly centralized; computation is carried out by trusted companies and data is stored on a handful of servers which are regularly (and successfully) attacked. Ethereum removes these risks by using a distributed set of computers (nodes) which maintain a ledger containing a history of all transactions (computations) ever to have occurred on its blockchain. This consensus among nodes ensures that malicious transactions which break the rules of the ledger are ignored. Transactions which do not break the rules are processed, and the processors of these transactions are rewarded with Ether (the token on the Ethereum blockchain).

The Ethereum blockchain is inflationary by nature. 2 Ether enter circulation (on average) every 15 seconds, however with upcoming protocol changes this supply inflation rate will drop to 2 Ether before then approaching zero in the years ahead. As a result, it is expected that Ethereum will have no more than 120,000,000 circulating coins and that the supply inflation will drop to near 0%. It is possible that through the loss of coins, “dust” wallets and the potential burning of gas fees, that the Ethereum token supply becomes deflationary (few coins circulating each year). With the supply of Ethereum being – for all intents and purposes – fixed at 120m, any upward pressure in demand for these tokens will also have an upward pressure on price. The essence of whether buying Ethereum with PayPal is a good investment comes down to future demand for the currency. Demand is influenced predominantly by two main factors:

  • Blockchain usage
  • Due to difficulties with usability (from buying Ether to transacting it), there are very few widely adopted decentralized applications (dApps) on Ethereum. For this reason, the blockchain in its current state provides very little value to existing or new users. Furthermore, Ethereum is only capable of handling roughly 2 million computations per day; a limit that falls drastically short for any type of mainstream application.
    Investors who wish to buy Ethereum with PayPal can do so at the exchanges listed on this page. PayPal is a great alternative for many users who demand convenience or are unable to make bank transfers from their country of residence. PayPal can also be used to buy Ethereum as a means of avoiding the expensive bank fees that are applied when converting currencies. The good news is that there are a number of Ethereum exchanges which accept PayPal deposits/withdrawals and a full list of these can be found below. A comprehensive explanation and guide to purchasing Ethereum with PayPal is elaborated on underneath these exchanges.

    These scaling issues are being resolved through the likes of Sharding and second-layer scaling platforms. In the meantime, developers are working hard to launch dApps like Augur, uPort and FunFair (among dozens of others) with the expectation of future scale. The ecosystem is rapidly expanding and these changes are anticipated to fuel future demand for Ethereum tokens.

  • Store of value
  • Bitcoin has been touted as the “store of value” token for the blockchain-led future, however many underestimate the ability of Ethereum to fulfil this same use-case. A network upgrade to the Ethereum protocol called “Shasper” (a proof of stake consensus algorithm) is expected in 2019, at which point the buying and hold of Ethereum will generate a regular dividend payment.

For more information on the Ethereum protocol and its value as an investment, see our how to buy Ethereum guide.

Step-by-step PayPal Buyer’s Guide

There are a multitude of platforms in which one can buy Ethereum with PayPal, however for the purposes of this guide we will look at the peer-to-peer exchange localethereum.com. This exchange provides its users with anonymity and allows them to connect “peer-to-peer” using the localethereum marketplace. Registering an account is free and instant and users can trade in any country in the world. For those not familiar with buying cryptocurrency, consider this platform the “eBay of Ethereum”.

1. Select “PayPal” as a payment method
Navigate to the homepage and select “PayPal” from the payment method drop down. Users are able to connect with Ethereum sellers from anywhere in the world, however if you’d prefer to deal in your local currency it is advisable to select a location at this point too.

localethereum homepage

2. Find an appropriate seller
Each listing will show the seller’s location, the price at which they are selling Ethereum, how much Ether they are willing to sell (their limit) and the number of trades they have completed. Those with a lightning bolt icon are also likely to respond quickly, which is particularly useful if you are looking to buy Ethereum as soon as possible. Once you have found an appropriate seller, click the Buy button.

localethereum listings

3. Set a price to buy Ethereum
With a seller selected, it is now time to set how much Ether you wish to buy. This can be done by setting the amount of Ether or the amount you wish to spend in your local currency. At this point, it is critical to examine the seller’s terms of trade; these outline the speed at which you need to make the trade or any identification you may need to provide. Most sellers do not require ID.

buying Ethereum with PayPal

Once the trade is opened, a chat dialogue between you (the buyer) and the seller will be opened. Details of the PayPal address to send payment to will be provided and an escrow will be used to ensure safe receipt of the Ethereum.

A purchase of Ethereum with PayPal can be executed in a matter of minutes. In the case of localethereum, the speed at which you access your newly-bought Ether is heavily reliant on the response of the seller. Other platforms such as eToro (above) will credit your payment instantly.