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EOS ICO

How to Buy EOS with PayPal – Your Top 9 Options

Time’s running out on the EOS.IO initial coin offering (ICO). On June 1, the last of the one billion placeholder tokens will get distributed. People who want to get in on the ICO distribution don’t have much time.

The question is, how do you pay for the EOS Tokens? If PayPal is your only option, you face a round-about journey. Our guide will help by explaining how to buy EOS with PayPal.

The Disappearing EOS Token

EOS.IO
Source: EOS.IO

The most important thing to know about the EOS Token is that it’s temporary. Every EOS Token will cease to exist on June 2. If you haven’t registered your EOS Token holdings before then, your entire investment will disappear. A few exchanges that support EOS Token promise to handle this process for you.

This vanishing act isn’t a scam. It’s the nature of the way EOS.IO is being brought to market. Dan Larimer, the blockchain developer behind platforms like BitShares and Steemit, wanted to create a more equitable distribution for the EOS.IO coin offering. In most ICOs, insiders and wealthy investors snag the lion’s share of the coins, leaving normal cryptocurrency investors to pay higher post-ICO prices.

An ICO for everyone

Larimer decided to take a slow-drip approach with the EOS.IO launch. Instead of happening all at once, the token distribution happens in small, daily releases over the course of a year. A formula divides the tokens released each day based on the amount of ether (ETH) you contribute to the project that day. It still means wealthy investors will get more of the EOS Tokens, but small investors still get their cut of the ICO.

Another twist created by the drawn-out ICO is that the EOS.IO blockchain does not exist yet. The EOS Tokens being distributed in the ISO are actually ERC-20 tokens distributed through the Ethereum blockchain.

EOS MainNet swap

When the ICO closes, the EOS.IO community will take a snapshot of the EOS Tokens’ addresses on the Ethereum blockchain. That snapshot will then become the first block on the EOS.IO blockchain and everyone will now own the EOS coin. This process is called the EOS MainNet swap.

That snapshot is why registering your EOS Tokens on the EOS.IO website is so important. Only registered tokens will get swapped to the EOS blockchain. Unregistered EOS Tokens will disappear after the MainNet swap.

What is EOS.IO anyway?

Once it’s operational, EOS.IO will be a platform for developing decentralized applications, or DApps. The platform acts like a computer operating system, but uses the blockchain to let DApps scale dramatically. In some ways, EOS.IO will compete with the Ethereum blockchain as well as with cloud platforms like Amazon Web Services

Using PayPal to Fund EOS Purchases

PayPal
Source: PayPal

The big catch you will face is that none of the major exchanges that trade EOS Tokens accept PayPal. The risk of fraud these exchanges face make PayPal transactions too expensive.

Since you can’t buy EOS with PayPal directly, you will have to take a more indirect route. There are four niche services that do accept PayPal, but only for Bitcoin purchases. You can buy Bitcoin from these services with PayPal, deposit your Bitcoin at an exchange that deals in EOS, and then trade your Bitcoin for EOS.

Following this path, you will get hit with higher fees and more expensive exchange rates. We can only recommend it if you don’t have a bank account or can’t qualify for a credit card — in other words, if PayPal is your only option.

Peer-to-peer marketplaces

LocalBitcoins
Source: LocalBitcoins

Similar to Etsy or eBay, peer-to-peer marketplaces host advertisements from people who have Bitcoin to sell. You search through the ads to find an offer that meets your needs and then negotiate the deal with the seller directly.

The two major players in the peer-to-peer space are LocalBitcoins and Paxful. LocalBitcoins has been around longer. As a result, you may find more offers than on Paxful, but it’s still worth checking out both.

You don’t need an account to search through the listings on Paxful or LocalBitcoins. You will need to provide an email address, however, to create an account on either market. Verifying your email address or mobile phone number helps build sellers’ trust in you. Some sellers won’t deal with unverified accounts, so verification will give you access to more deals.

Fees

Paxful and LocalBitcoins are free for the buyers. The sellers get charged a fee for placing each ad they list.

As we discussed, however, some sellers are more expensive to work with than others. Be sure to check the terms on the offer page to understand what’s expected from you.

Getting started

The two marketplaces work almost identically. Starting from the form on the home page, you enter the amount of money you want to spend and the payment method you want to use.

The marketplace displays your search results with the cheapest option listed at the top. You can see in the screenshot below that there is a pretty wide range of exchange rates.

Results of PayPal search on LocalBitcoins
Source: LocalBitcoins

You can get the lowest rates by reducing the seller’s risks. Having a verified account and a good buyer rating helps. So does going through the seller’s verification process. The more anonymous you want your relationship with the seller to be, the more risk the seller takes and the worse the exchange rate gets.

You can go to the offer page to learn more about the requirements as well as more about the seller. Both Paxful and LocalBitcoins use a rating system to give buyers an idea of how trustworthy each seller might be.

A Bitcoin offer on Paxful
Source: Paxful

When you and the seller agree to a deal, the seller deposits the promised Bitcoin into an escrow wallet. Paxful or LocalBitcoins controls the wallet. If you don’t deliver the promised cash, the buyer gets his Bitcoin back. If the buyer takes your money, he can’t just disappear on you. You get the Bitcoin.

If you want to learn more about the peer-to-peer marketplaces, check out our reviews:

Your plan B options

If you aren’t comfortable dealing one-on-one with the sellers on the peer-to-peer marketplaces, you still have a couple of options to use PayPal. These fringe services accept PayPal, but they are expensive and inconvenient.

VirWoX

VirWoX
Source: VirWoX

Way back in 2003 when Britney Spears, Harry Potter and The Matrix were Google’s top search queries, the virtual world Second Life opened its doors. Fifteen years later, Second Life is still around. It even has its own internal currency, the Linden Dollar.

VirWoX is an exchange that specializes in Linden as well as several other in-game currencies. In addition to buying and trading these virtual coins, you can buy Bitcoin.

What’s inconvenient about VirWox is that you can’t use PayPal to buy Bitcoins directly. You deposit cash, euros or dollars, into your VirWoX account. Then you use the money to buy Lindens. Then you use Lindens to buy Bitcoin.

So not only are you using an indirect route to buy EOS Tokens, you’re taking an indirect route to buy the Bitcoin you need to buy EOS Tokens indirectly with Bitcoin.

We’ll give you some basic information about the fees and trading process in case you want to consider this option. To find out more, check out our article VirWox Review: Still Relevant Because of PayPal Funding Option.

Fees

VirWoX charges fees at every step in the trading process. First you have to pay the PayPal merchant fee. The amount depends on your relationship with PayPal so you won’t know how much it is until after the payment goes through. VirWoX claims that, using euros, deposits cost €0.35 plus a 3.4% processing fee.

Most people then pay 3.9% plus 50 Lindens for every exchange — that’s 3.9% to convert dollars into Lindens and 3.9% to convert Lindens into Bitcoin. Euro-to-Linden trades only cost 2.9% plus 50 Lindens.

At the end of all of this, VirWoX charges a 0.0005 Bitcoin withdrawal fee when you pull your coins out of your account. Overall, buying Bitcoin with PayPal on VirWoX will cost you about 12% in fees.

Getting started

The VirWoX deposits page has a Pay with PayPal button. Click it to deposit your euros or dollars into your account.

VirWoX payment options
Source: VirWoX

Let’s say you work in dollars. Choose the USD/SLL option to initiate your first trade and get Lindens.

Buy Lindens with Dollars on VirWoX
Source: VirWoX

Now choose BTC/SLL option to get your Bitcoins.

Buy Bitcoins with Lindens on VirWoX
Source: VirWoX

Wirex

Wirex Home
Source: Wirex

Last year, Wirex was on its way to becoming a popular way to spend your Bitcoins. The Wirex-branded credit cards linked to your digital wallet to fund all of your online and real-life transactions. Unfortunately, the credit card issuer Wirex partnered with made Visa very angry and all of the cards had to be cancelled. Wirex has a new card issuer lined up and will restart its service real soon.

You’ll need to check the Wirex site to see if that’s happened, because the only way Wirex will accept PayPal is if by linking your Wirex Visa Card. That raises an important question: why use PayPal at all if you can use a credit card?

Only you can answer that. If the PayPal/Wirex option makes sense for you, this section provides you with the background. Our article Wirex Review: a User Friendly Exchange with Low Fees and Crypto Debit Cards provides you even more details.

Fees

Wirex does charge its customers a monthly fee as well as fees for depositing or withdrawing US dollars. All of the Bitcoin trades you make on Wirex, however, are free. You don’t even have to pay Bitcoin mining fees until you withdraw your coins.

Getting started

The Bitcoin-with-PayPal process can take weeks to complete unless you already have a Wirex account. The mandatory identity verification process can take a week and a half to complete. Signing up for the Wirex credit card (once you can actually do that) could take several days.

Wirex Signup
Source: Wirex

Once you get your Wirex credit card, you must link the card within your PayPal account. Even after you get everything set up, the actual transfer of funds from PayPal to the Wirex credit card can take additional days to complete.

Exchanging Bitcoin for EOS Tokens

Now that you’ve bought your Bitcoins, you need to trade them for EOS Tokens. Although only a few exchanges list EOS Tokens, these four options are the safest way to get it done.

Changelly

Changelly review
Source: Changelly

Changelly is the easiest exchange to work with, but also the most expensive. Changelly constantly scans exchanges like Kraken and Poloniex for the best exchange rates and then conducts your trade for you. This process makes Changelly very secure as it only holds your digital assets during the brief time it takes to make the trade.

Make sure you get an Ethereum-based wallet to receive your EOS Tokens. Evidently, not all of these wallets are created equal. The EOS.IO faq page only recommends two wallets, MetaMask or MyEtherWallet, to be guaranteed compatible with the EOS MainNet swap.

Since you will hold the EOS Tokens you get through Changelly, registering with EOS.IO is your responsibility.

Fees

Changelly’s transaction fees are much higher than the professional trading platforms. You pay for the simplicity and ease of use. Your Bitcoin-to-EOS Token trade will generate a 0.5% transaction fee.

Getting started

EOS on Changelly
Source: Changelly

Once you’ve created a Changelly account, all you need to do is enter Changelly’s wallet address in your Bitcoin wallet and give Changelly your Ethereum wallet address. Changelly handles the rest. For a more detailed overview, check out our review of Changelly.

Binance

Binance review
Source: Binance

Founded in China, but now based in the Mediterranean island nation of Malta, Binance is a high-speed cryptocurrency exchange. With a listing of more than 110 coins and tokens, Binance became very popular very fast. Its 8 million users generate $1.5 billion in crypto trades every day.

Not only does Binance allow Bitcoin-to-EOS Token trades, the company promised to handle all the details of the EOS MainNet swap on its customers’ behalf.

Fees

Deposits and withdrawals at Binance do not get charged for anything beyond the blockchain network fees.

The Bitcoin-to-EOS Token trade will cost most new customers 0.1%. Binance has a way to reduce those transaction fees to 0.05% by using its house-brand token. Check out our detailed Binance review to find out more about the BNS discounts.

Getting Started

Binance account holders can place their trades directly from the BTC/EOS market page.

Kraken

Kraken review
Source: Kraken

Kraken has a much smaller listing of four fiat currencies and sixteen cryptocurrencies. The high liquidity on Kraken’s markets, however, make the exchange a popular choice in the crypto community. Check out our Kraken review for more information.

Kraken has also committed to supporting the EOS MainNet swap.

Fees

Kraken will not charge you for your Bitcoin deposit. You will get charged for buying EOS Tokens – 0.16% of the trade’s value. If you keep trading on Kraken, you can take advantage of its volume discounts.

If you don’t want to keep your tokens your own wallet for the MainNet swap, Kraken will charge you 0.50 EOS Tokens for the withdrawal.

Getting Started

Kraken’s BTC/EOS market page has an order form that will let you make the quick Bitcoin-to-EOS Token trade.

KuCoin

EOS on KuCoin
Source: KuCoin

KuCoin only went live last August. Less than a year later, the Singaporean exchange had more than 4 million users.

KuCoin is also supporting the MainNet swap.

Fees

Depositing Bitcoin is free and trades will cost 0.1%. Withdrawing to your Ethereum wallet will cost you 0.50 EOS Tokens.

Getting started

The KuCoin trading interface has a BTC/EOS market where you can place your order.

eToro

eToro trading interface
Source: eToro

The social trading network eToro got its start in the traditional financial system’s derivatives and forex markets. The exchange began ramping up its support for cryptocurrencies last year. We have much more detail in our eToro review.

Although eToro lists EOS Tokens, the company has not issued a formal statement about the EOS MainNet swap. The safest thing for an eToro customers to do would be withdrawing your EOS Tokens into an Ethereum wallet and registering the tokens with EOS.IO before June 1.

Fees

eToro does not charge for buying and holding cryptocurrency. The exchange’s withdrawal fees, however, are pretty steep. You will need to buy a lot of EOS Tokens to justify the $25 exit costs.

Getting Started

As with the other exchanges, the order form on the BTC/EOS market page will get your trade started.

Final Thoughts

PayPal is just about the worst way to get into the EOS.IO initial coin offering. You have to jump through so many hoops and pay so many fees that you may decide to seek out better options, now that you know the details.

However, not everyone has a bank account and credit problems can make getting a credit card tricky. For some people, PayPal is the only option for entering the emerging blockchain-based economy.

If your only choice is to buy EOS with PayPal, we recommend using one of the peer-to-peer exchanges. Provide as much information as you can so you can get the lowest exchange rate. Then use one of the mainstream exchanges to convert your Bitcoin into EOS Tokens.

Christopher Casper

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