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PayPal vs Blockchain is a fair comparison as businesses can pick either of these options to flourish. PayPal is more centralized; blockchain offers cross-border payment, instant payments, scalability, and security.
Last updated Sep 19, 2022 at 9:47 PM
Posted Sep 20, 2022 at 4:00 PM
Blockchain and Web 3 in business:
A blockchain is an online public ledger that stores the data of transactions in a way that is immutable and validated in a decentralized way. Working on SHA-256 and cryptography, blockchain offers a secure way of making transactions with more financial freedom due to its decentralized nature.
The DeFi (Decentralized Finance) financial system was born as a result of the decentralization of finance. New, intelligent algorithms that use AI and machine learning can assess and adapt to deliver user-centric experiences. Additionally, compared to earlier iterations of the Web, Web3 will be far more inclusive. Web3's decentralized structure provides the ideal environment for the quick and transparent flow of information that isn't subject to restriction by a single authority.
Additionally, Web3 does away with middlemen like Facebook that take a share of customers' money (and personal data) when they make online purchases. Nevertheless, every aspect of our transactions is known to the public, for better or worse. The volume of e-commerce transactions will increase, and improving the security and simplicity of online transactions will encourage businesses to accept cryptocurrency payments.
Banks and governments are threatened by the decentralized nature of crypto. Stakeholders who do not want people to have control over their own money are banning these digital assets; meanwhile, countries such as Russia, Ukraine, and El Salvador benefit from blockchain-based assets.
We are living in blockchain infancy and there are very few blockchain-aware institutions and individuals. If a bank doesn’t understand how crypto works or is threatened by the way it functions, it won’t allow people to buy it using its channels. Because of blockchain's novelty and a crypto-averse attitude, most businesses continue to use centralized and traditional banking channels, despite the incredible benefits and freedom DeFi can provide.
Most of the Internet we browse is Web 2. YouTube, Instagram, Facebook, Twitter, and TikTok are all prominent Web 2.0 platforms that create hardly any content themselves and instead rely on users to create it. Over 84% of Internet content is user-generated, yet Web 2 doesn’t give these users the right to own their own content. YouTube can delete any video without prior notice, and Twitter has banned former US President Donald Trump from its platform. Web 3 offers end users the ability to create, own, and incentivize their content through blockchain. Web 2 largely relies on a centralized source where entities or companies like Google own most of the Internet. Blockchain, though, distributes this power to those who use it on Web 3.
In the current financial model, where businesses are powered by the web and classic banking networks, a normal transaction through PayPal or Strip can cost up to a 4% transaction fee. Transactions might take 24 hours to 3 business days to be completed, depending on where you are sending and from where you are sending.
This is the era of 5G where if a transaction arrives even a few hours late, it won’t be able to keep the business competitive. There are additional restrictions such as transaction amount limits, cross-border transaction checks, and so on. Banks and governments control the price of fiat and can literally print any amount of cash, thereby dropping its value for ordinary people and businesses.
The web-based DeFi model is a perfect solution to all financial ills. There are no sending or receiving limits; crypto doesn’t bother about borders, and no single person or entity controls it. You might be bothered by the notorious volatility, but crypto-stable coins like USDC and USDT are your escape. These coins offer everything you might expect from crypto except that their price remains stable (mostly pegged to USD).
PayPal vs Blockchain is actually not a fair competition because the blockchain products offer future financial products like crypto, DeFi, DeFi, GameFi, and Metaverse. Blockchain is a panacea for all the problems that corporations and individuals face today with current bank-backed models.