Why do you think Paypal couldn't use Bitcoin successfully?
They can't add any value to what the bitcoinosphere offers.
All they can do is add fees to it, while simultaneously legitimizing bitcoin itself.... A fatal mistake.
If they embrace bitcoin, the price of bitcoin is going to skyrocket because people will finally feel that bitcoin "is safe and even the big corps use it now."
Doing so makes bitcoin far, far, far harder to compete with, as the higher price will make far more people mine it and own it and get rich from it and accept it and write apps for it and so on; to a point where all of the old payment options just look
archaic.
1) Want to pay with Bitcoins, but the seller wants to receive USD? Paypal does the conversion, just like it does with national currencies.
2) eBay. Existing platform with hundreds of millions (or billions?) in sales each year. Paypal acts as an escrow agent for each transaction, just the same as they do with fiat currencies now.
3) Want to send Bitcoins to your relative, but don't know their Bitcoin address? Simple - just send it to their Paypal account.
4) Integration with merchant systems that already utilize Paypal.
5) Good financial reporting on sales made in Bitcoin.
Most of these can add a minor value each that, when taken together, still make an inconsequential argument... The cost of Bitcoin's dominance is too big a price for them.
The more legit bitcoin grows, the more people will see how cheap it is to send bitcoin from a wallet to another directly... 3% or even only 2% on top of all purchases is something almost everyone would want to skip paying.
So let's fast forward to an imaginary future 5 years after paypal integrates bitcoin to offer all 5 of these services...
1) Paypal will still not be able to compete with bitpay's fees... Not unless they undertake a complete structural change and have massive layoffs. Meanwhile, Bitpay (or a
BTC competitor) is going to grow, becoming known to pretty much all merchants worldwide. By then, I fully expect them to offer more overlapping services too, including money-to-email-address.
2) eBay is one store with high fees. Competition from millions of bitmits/bitcoinstores with lower/no fees will ad up to make this almost a negative point.
3) We already have Coinapult. Give it a few months (Or days at this rate) and smoother services will allow bitcoin to email, surely bitpay will too. (And not just email addresses registered with paypal!)
4) The number of merchants integrated with bitpay in 5 years could be in the same ballpark with paypal's merchants today. It won't be a major draw.
5) Surely Bitpay offers good accounting too already.
Without a doubt, 5 years after including a bitcoin service, paypal is going to realize that they have just spent 5 years
advertising for their competition while their own marketshare plummets.
Actually, it's better than that... They aren't just legitimizing bitcoin to the masses, they'd be giving them a halfway-step from a system they know to the bitcoin system so technically they'd be easing everyone into bitcoin gently. Oh man I wish they'd fall for this trap, but it would be a fatal mistake for their biz if they did. They aren't that dumb.
