If PayPal was Bitcoin

[Dansker]

I've been thinking a bit about Bitcoin's maximum value as a means of international payments, and I've come to wonder how much 1 BTC would be worth, if it had the market share that PayPal has today?

Do you think there is any reasonable way to guesstimate this?

[adamstgBit]

bitcoin is so much better then paypal

if bitcoin was used as much as palpay, it would immediately become the preferred method of payment, and take over all transactions (internet and real world)

so about 21,000,000$ / BTC 

[bracek]

I think last year there was a thread about it,
and someone calculated 1 btc between 60 and 100 usd
if it replaced paypal

[Vladimir]

Ebay market cap is ~ 50 Billion $, paypal is about half of that conservatively. Given 10 million of BTC in circulation soon, this should value "paypal replacement" of 1 BTC at ~ 2500$. Enjoy!

[Stephen Gornick]

I've been thinking a bit about Bitcoin's maximum value as a means of international payments, and I've come to wonder how much 1 BTC would be worth, if it had the market share that PayPal has today?

Do you think there is any reasonable way to guesstimate this?

PayPal's payment volume in 2011 was $118 billion.

That means it did about $323 million USD per-day of payment transactions.

What matters is the turnover.  If the duration between when a person acquires a bitcoin and when it is spent were to be half a day, on average (pulling a number out of thin air), then the nearly 10 million bitcoins that exist today are sufficient enough support economic activity of about 20 million BTC per day.  So at current valuation of $6.50 per bitcoin, bitcoin's existing supply could support $130 billion worth of economic activity.

So, if each bitcoin were to turnover twice a day, then currently the valuation of $6.50 is sufficient, but just barely so, to handle the payments market share that PayPal has today.

Now if even a tiny fraction of that volume were coming any time soon, the bitcoin exchange rate would go much higher, because system-wide turnover is nowhere near twice a day.   While some people spend their bitcoins within ten minutes, others have socked them away for the next generation.

But this gives and easy round number to use.  If you think turnover will be once a month, then that is 60 times the number I chose for this.  So the exchange rate would be 60 X $6.50 or a BTC/USD of nearly $400.

[niko]

So, which one is more likely -
1. Bitcoin payment processors growing, Paypal market share shrinking, Paypal attacking and losing battles, btc processors successfully lobbying, Paypal going titsup, Bitcoin dominating, OR

2. Bitcoin payment processors growing, Paypal market share shrinking, Paypal adopting btc, Bitcoin dominating

I know, I know- there are other, more likely scenarios, but my point is that big businesses might actually embrace btc, especially if we quit bashing them. Not sure if I'd prefer that, but just putting that option on the table.

[ElectricMucus]

The success of paypal has mainly to do with ebay. If it weren't for it it would only play a very minor role in the whole payment business. eBay has a quasi monopoly on certain collectibles like vintage instruments, records etc.. and for used/scrap/discount industry goods.

But it's also the quasi reversible transactions which people like and which is against bitcoins philosophy so I don't really expect bitcoin to take a significant market share out of it.
The thing for BTC imo right now are micro-transactions, supporting a website you like, etc... and we are seeing more and more of that.

[niko]

Its there anything like a btc auction site out there? Call it Vanilla Road if you like. Speaking of roads, how does SR deal with dishonest merchants? Do they hold coins in escrow? Are there chargebacks in case of disputes? Would any of you here buy from this hypothetical btc-bay over Ebay if you had a choice?

[ElectricMucus]

Its there anything like a btc auction site out there? Call it Vanilla Road if you like. Speaking of roads, how does SR deal with dishonest merchants? Do they hold coins in escrow? Are there chargebacks in case of disputes? Would any of you here buy from this hypothetical btc-bay over Ebay if you had a choice?

I wouldn't even hesitate.

The problem is eBay will never do it they earn way too much via paypal. There are aleady plenty of eBay like sites for BTC the issue with auction sites is the more popular it is the more people flock to it. As there are plenty other auction sites which also use paypal or similar.

It would have to be something entire different which gives a genuine advantage over eBay, just cloning it will not work.

Bitcoin could be used in some communities (I have synths for ex) to trade. But most people (as well as myself) wouldn't use it for that as long as the volatility is above 50% annual.

[adamstgBit]

So, which one is more likely -
1. Bitcoin payment processors growing, Paypal market share shrinking, Paypal attacking and losing battles, btc processors successfully lobbying, Paypal going titsup, Bitcoin dominating, OR

2. Bitcoin payment processors growing, Paypal market share shrinking, Paypal adopting btc, Bitcoin dominating

I know, I know- there are other, more likely scenarios, but my point is that big businesses might actually embrace btc, especially if we quit bashing them. Not sure if I'd prefer that, but just putting that option on the table.

Paypal adopting btc
why not!
they could make profit simply by providing a way to exchange any kind of PP money & BTC
and they could buy 100,000BTC on the side and profit BIG time by helping bitcoin on its quest for free money!

BTC
No Government or corporation controls it
But all Government all corporation want a piece of it.
the way it should be

[proudhon]

So, which one is more likely -
1. Bitcoin payment processors growing, Paypal market share shrinking, Paypal attacking and losing battles, btc processors successfully lobbying, Paypal going titsup, Bitcoin dominating, OR

2. Bitcoin payment processors growing, Paypal market share shrinking, Paypal adopting btc, Bitcoin dominating

I know, I know- there are other, more likely scenarios, but my point is that big businesses might actually embrace btc, especially if we quit bashing them. Not sure if I'd prefer that, but just putting that option on the table.

Paypal adopting btc
why not!
they could make profit simply by providing a way to exchange any kind of PP money & BTC
and they could buy 100,000BTC on the side and profit BIG time by helping bitcoin on its quest for free money!

BTC
No Government or corporation controls it
But all Government all corporation want a piece of it.
the way it should be

For PayPal:

1.  Buy 100,000BTCs
2.  Announce that you'll be accepting bitcoin.
3.  Profit.

[adamstgBit]

[Dansker]

So, which one is more likely -
1. Bitcoin payment processors growing, Paypal market share shrinking, Paypal attacking and losing battles, btc processors successfully lobbying, Paypal going titsup, Bitcoin dominating, OR

2. Bitcoin payment processors growing, Paypal market share shrinking, Paypal adopting btc, Bitcoin dominating

I know, I know- there are other, more likely scenarios, but my point is that big businesses might actually embrace btc, especially if we quit bashing them. Not sure if I'd prefer that, but just putting that option on the table.

Paypal adopting btc
why not!
they could make profit simply by providing a way to exchange any kind of PP money & BTC
and they could buy 100,000BTC on the side and profit BIG time by helping bitcoin on its quest for free money!

BTC
No Government or corporation controls it
But all Government all corporation want a piece of it.
the way it should be

For PayPal:

1.  Buy 100,000BTCs
2.  Announce that you'll be accepting bitcoin.
3.  Profit.

That is actually true.

They could do the biggest pump and dump ever haha

[proudhon]

So, which one is more likely -
1. Bitcoin payment processors growing, Paypal market share shrinking, Paypal attacking and losing battles, btc processors successfully lobbying, Paypal going titsup, Bitcoin dominating, OR

2. Bitcoin payment processors growing, Paypal market share shrinking, Paypal adopting btc, Bitcoin dominating

I know, I know- there are other, more likely scenarios, but my point is that big businesses might actually embrace btc, especially if we quit bashing them. Not sure if I'd prefer that, but just putting that option on the table.

Paypal adopting btc
why not!
they could make profit simply by providing a way to exchange any kind of PP money & BTC
and they could buy 100,000BTC on the side and profit BIG time by helping bitcoin on its quest for free money!

BTC
No Government or corporation controls it
But all Government all corporation want a piece of it.
the way it should be

For PayPal:

1.  Buy 100,000BTCs
2.  Announce that you'll be accepting bitcoin.
3.  Profit.

That is actually true.

They could do the biggest pump and dump ever haha

If bitcoin manages to stick around for a few more years, then I think it's inevitable that this will happen (not necessarily, and doubtfully, PayPal, but somebody big enough will eventually jump in the pool and make waves).  Again, I don't see it happening for while.  I wouldn't bet on it until maybe even after the second block reward change.

[DeathAndTaxes]

For PayPal:

1.  Buy 100,000BTCs
2.  Announce that you'll be accepting bitcoin.
3.  Profit.

Even better.

1. Buy 100,000 BTC
2. Let is leak out that you will be accepting bitcoins.
3. Support the leak by allowing some API specs and other technical docs to be leaked.
4. Profit.
5. Announce the rumors are untrue.
6. Profit.

2 for 1 baby!