Adult entertainment website PornHub has just lost one of it’s top money-makers, as payments giant PayPal has pulled out suddenly and without warning, reducing the number of options available to the site’s ‘models’ for funds withdrawal.
PayPal has not said anything about on why it has decided to revoke its services from the site as of writing and due to the taboo nature of the brand-association it is likely they will remain silent in this regard.
Despite the fact that no quantifiable details have been revealed as of yet, one need only observe choice of language and tone in the statement released by PornHub to deduce that the company is greatly frustrated by this loss.
The statement, pubslished on November 14th, reads:
“We are all devastated by PayPal’s decision to stop payments to over a hundred thousand performers who rely on them for their livelihoods.”
PornHub Statement
For many businesses the loss of a payment option as popular as PayPal could spell certain doom, especially those which rely heavily on independent creators.
So what makes this situation different? (unspoken)
Though lesser discussed, Pornhub is an internet titan like YouTube and WordPress. It actually ranks higher than PayPal itself according to Web Rankings by Alexa: sitting at #42 in global internet engagement, compared to PayPal’s position at #96.
Rather than the threat of a mass exodus of contributors, this could actually result in a much greater revenue hit to PayPal than Pornhub, and the contributors would likely rather change their preferred payment than move to a less popular platform and receive less exposure.
Here’s where the blockchain connection comes in. One of the alternative choices available to PornHub contributors is the Verge cryptocurrency (XVG) and the loss of top competitor PayPal gives XVG a clear shot at converting ex-PayPal users into Verge customers.
It’s easy to imagine how PayPal’s loss could very well be XVG’s gain, and a victory for cryptocurrency in general.
Indeed, Verge jumped in value following this news. As of 2:45am (GMT) on 15th November 2019, according to CoinMarketCap, XVG is enjoying a 14.11%+ change in 24 hour token value.
Like almost every industry under the sun, adult entertainment has had its fair share of run-ins with cryptocurrency. SpankChain is one of the most prolific examples, having received coverage from the likes of Forbes and the Huffington Post – as well as maintaining partnerships with district 0x and Connect.
What makes this story significant, is the sheer size of the PornHub as a media organisation along with the potential for direct sales conversions: both from PayPal to a blockchain oriented payments system, as well as from fiat to cryptocurrency in general.
Why PayPal would suddenly cut ties with such a high-revenue partner is difficult to ascertain. The company has made decisions to cut funding from individuals and organisations under ethical grounds in the past, however, these have largely been politically motivated to date.
A close example to this occurred last year, when Patreon reportedly started actively monitoring and restricted adult content published onto its crowdfunding platform.
According to Nasdaq, PayPal is “on the front lines of the war on cash” and has everything to lose when it comes to the war on cryptocurrency.
Visa and Mastercard, on the other hand, are secured by the dependance bestowed upon them by virtue of being two of the foremost (and arguably monopolistic) debit and credit card producers in the world, even being behind the vast majority of cryptocurrency related payment cards.
It might take a while yet, but PayPal must adapt, adopt, or assimilate to survive whilst blockchain digital assets draw ever closer to mainstream adoption.
