Buying Bitcoin through Paypal is something many people would like to do, but there are almost no exchanges out there that support Bitcoin purchases via Paypal. Thankfully I said “almost no”, because today I want to let you know about one exchange that will let you buy Bitcoin with Paypal, which is something that’s very helpful to a large group of individuals.
So, today I’ll talk a bit about Virtual World Exchange, or VirWoX, which has found an interesting loophole as part of their business model and because of this you can buy Bitcoin with Paypal.
Short Overview of VirWoX
VirWoX is interesting, because it’s been in business as a digital currency exchange since before Bitcoin was even created. That’s right, VirWoX was started in 2007 as a centralized digital currency exchange in Austria. It was created, and its main business model remains, as an online exchange for virtual currencies used in online gaming.
As you might imagine given the popularity of online gaming, and the increasing popularity of Bitcoin, VirWoX is extremely popular in the U.S., and also across Europe and even in Brazil.
VirWoX was initially created for exchanging Second Life Linden Dollars (SLL), and it later expanded to include trading in Open Metaverse Currency (OMC) and Avination’s C$. You can go to VirWoX and purchase or sell all of these virtual currencies with fiat currencies such as the U.S. dollar, Euro and British pound.
Now here’s where things get interesting for Bitcoin enthusiasts. In April 2011 the company began accepting Bitcoin for payment, and also as an exchange. It’s the only cryptocurrency available on the platform, but it’s basically a loophole where you can buy Bitcoin via Paypal by first buying Second Life Lindens and then converting them to Bitcoin on the VirWoX exchange. As of April 2018 the site has over 1 million registered users, and despite not being able to send Linden dollars to Second Life avatars since August 2015 it has a 24-hour trading volume of over 137 million SLL.
Currently the platform offers its services for the following currencies:
- SLL – BTC/SLL, EUR/SLL, CHF/SLL, USD/SLL, GBP/SLL
- OMC – USD/OMC, SLL/OMC, EUR/OMC
- ACD – SLL/ACD, EUR/ACD, USD/ACD
- MVC – EUR/MVC
How VirWoX Works?
VirWoX is a very clever business enterprise. It managed to exploit its status of the official authorized Linden Dollar reseller to also purchase/sell Bitcoins directly, and this feature is something that makes it unique on the market of cryptocurrency exchange.
VirWoX doesn’t require any verification and because it isn’t dealing with the banking/financial community very little personal information is required.
VirWoX is available worldwide.
Safety and Security
The VirWoX site clearly states that any personal information you share with them will not be shared with any third parties. The exception to this rule is if they would be ordered to surrender the information to public authorities or law enforcement. The site employs HTTPS protocol, making your login information and any other information shared on the site safe and secure.
The company itself employs very stringent manual verification of transactions, which has resulted in a fairly large number of complaints by users that have been flagged, but as far as I can tell from online reviews none of these flagged accounts have ever had their money withheld. They may have had to wait a couple days, but in each case money is returned to the user if their account is flagged, blocked or suspended.
One further note on security is that the service does not store your credit card information.
Now the kinda bad news. VirWoX does have restrictions on how much you can deposit daily and over the course of 30 days. Those trading limits apply to Paypal and Skrill deposits and are as follows:
Level 0 (immediately) – 90 EUR daily; 270 EUR over 30 days
Level 1 (after 10 days) – 120 EUR daily; 900 EUR over 30 days
Level 2 (after 45 days) – 200 EUR daily; 2000 EUR over 30 days
Level 3 (after 90 days) – 400 EUR daily; 4000 EUR over 30 days
Level 4 (on request) – 1000 EUR daily; EUR 10,000 EUR over 30 days
The numbers in parenthesis correspond not to the age of your account, but from the number of days after your first successful deposit. This means you can’t simply register an account and wait for it to age 90 days to get level 3 access. You must make a deposit before the clock starts ticking. Limits are in Euro, so if you need to deposit in a different currency simply use an online calculator to see what the current exchange rates are.
Online Reviews by VirWoX Users
If you look online you’ll find very few positive reviews of VirWoX and plenty of negative reviews. What you’ll quickly notice is that the negative reviews typically fall into two categories:
1. Complaints about the high fees at VirWoX.
2. Complaints about accounts being banned and the user doesn’t know why.
Let’s discuss the banning of accounts first. As I mentioned above, the users who find their accounts banned have always had their money refunded, even if it takes a few days. I wasn’t able to find online accounts of anyone who didn’t get their money back. And that makes sense, because the company certainly wouldn’t have lasted 11 years in business and have over 1 million registered users if they’re stealing from their customers.
There’s been no explanation from VirWoX as to why they ban so many accounts. I can make an educated guess though. Selling through Paypal introduces a high risk of fraud from bad actors, so they are likely much more cautious when compared with other exchanges. This doesn’t make the service a scam, it simply makes them cautious, and I can’t really blame them for that.
Regarding Transaction Fees
The other area of online complaints is that VirWoX charges very high fees for exchanging Bitcoin using Paypal and it’s true. They do charge high fees, but there are a few reasons why this is the case:
1. There’s a high chance of fraud and chargebacks when dealing through Paypal and so they need to charge a risk premium to cover their losses.
2. The site wasn’t built or designed to buy Bitcoin directly – in fact it really wasn’t designed for buying Bitcoin at all, it was designed so that users could deposit Bitcoin and buy virtual currencies. In any case, this means that you first need to buy SLL and then convert that to Bitcoin. Each transaction on the site has its own fee, so it does add up.
3. Because there are very few other sites that allow you to purchase Bitcoin via Paypal and they can. With so little competition out there they can charge high fees and people will continue using their service (even if they complain about it). Truthfully, LocalBitcoins is one of the few good alternatives for buying Bitcoin with Paypal and they’re probably more expensive because of the markup from sellers.
Unlike most other cryptocurrency exchanges (which they aren’t really), there are deposit fees at VirWoX and they vary based on the deposit method as follows:
- Bitcoin – Free of charge. Funds are available within 1-2 hours.
- My Virtual Community Pay Terminal – Free of charge. Funds are available instantly.
- PayPal Express Checkout – EUR 0.35 + 3.4%. Available currencies – USD, GBP, CHF, EUR. Funds are available instantly.
- Credit/debit cards – GBP 0.29 + 3.5%, USD 0.49 + 3.5%, EUR 0.96 + 3.5%. Funds are available instantly.
- OKPAY – Free of charge. Available currencies – USD, GBP, CHF, EUR.
- Skrill – GBP 0.29 + 3.5%, USD 0.49 + 3.5%, EUR 0.96 + 3.5%. Funds are available instantly.
- Paysafecard – 20%. Available currencies – USD, GBP, CHF, EUR. Funds are available instantly.
- Sofortbanking – 2.5% (min EUR 0.25). Funds are available instantly.
There are also withdrawal fees as follows:
- PayPal – 1 EUR (GBP, CHF, USD) plus 2% per withdrawal.
- Bitcoin – 0.0005 BTC.
- Skrill, Bank transfer… – 1 EUR (GBP, CHF, USD) handling fee per withdrawal.
And of course there are trading fees as follows:
- EUR/SLL: 50 SLL + 2.90%
- USD/SLL: 50 SLL + 3.90%
- GBP/SLL: 50 SLL + 3.90%
- CHF/SLL: 50 SLL + 3.90%
- EUR/ACD: 50 ACD + 3.90%
- USD/ACD: 50 ACD + 3.90%
- SLL/ACD: 25 ACD + 3.90%
- SLL/OMC: 25 OMC + 1.90%
- EUR/OMC: 50 OMC + 2.90%
- USD/OMC: 50 OMC + 1.90%
- BTC/SLL: 50 SLL + 3.90%
- EUR/MVC: 50 MVC + 2.90%
Sending virtual currency to fellow users is free. It’s important to note that you will be charged a 2$ inactivity fee per month if you haven’t used your VirWoX account for over 12 months, but only if your account features a positive balance. If you want to know ahead of time what your fees will be, calculating the total fees can present quite the challenge, so chances are you’ll just do the exchange and accept the fees.
While customer service isn’t exactly non-existent, you could find yourself sending several emails over the course of a week or longer before receiving a response.
So, Is VirWoX Legit?
VirWoX seems completely legitimate, if not necessarily the best way to purchase Bitcoin due to high fees, extremely long transaction times, and a lack of decent support. However if you really want anonymity when buying your Bitcoin, or have no other option than to purchase via Paypal, VirWox is a lifesaver.