PayPal president David Marcus is trying to make nice with bitcoin, the digital currency that could ultimately become a big competitor to his company's massively popular online payments service.
Today, on Twitter, he said the folks at PayPal are in fact "believers" in bitcoin and that the company supports the sale of bitcoin mining rigs, the machines that help drive the worldwide open source software system that is bitcoin. It's yet another sign that the influence of bitcoin is expanding – and that existing tech outfits like PayPal have no choice but to respond.
As it turns out, Marcus was responding to a bit of a firestorm that spread across the internet discussion forum Reddit over the weekend. On Sunday, a Redditor named Josh Best1 (jbest8283) posted a message from PayPal support that told him it was against PayPal policy to use the payment service for currency exchange, including the sale of bitcoin miners, bitcoin, or litecoin, a bitcoin alternative.
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That message wasn't well-received by the bitcoin community. While bitcoin and litecoin are digital currencies, bitcoin miners are most certainly not. They're specialized computers that earn bitcoins by processing transactions on the currency's peer-to-peer network.
PayPal didn't respond to our request for a comment, but on Twitter, Marcus noted that the text in the PayPal support message was "bad," and is "being corrected."
The sheer cluelessness of PayPal's support operation seems to have prompted Marcus' tweet, and Best soon reported that he'd received a followup message from PayPal telling him to forget about the whole you-can't-sell-a-bitcoin-miner thing.
According to Best, PayPal staffers no longer qualify as "complete jerks."
But the fact that PayPal's president is involved in this demonstrates how seriously the company is about watching the digital currency.
PayPal is a widely used and popular online payment platform, but it's a closed system. And if a lot more people start paying with Bitcoin and a lot more companies such as Overstock.com start accepting it, it could one day become a PayPal rival.
Whether PayPal will have a serious role to play as bitcoin's rival or supporter is still up in the air, but this isn't the first time that PayPal and its parent company, eBay, have indicated that they have an eye on the cryptocurrency. Last spring, eBay CEO John Donahoe said he was thinking of ways to integrate bitcoin into PayPal. PayPal, after all, already handles foreign currency conversions. On the surface, it doesn't seem like it would take much to roll bitcoin into its system.
1Update 6:20om EST 01/13/14: This story has been updated to include the real name of the Redditor jbest8283 .
