In order to be a real alternative to PayPal, Bitcoin will have to avoid the problems that digital gold currencies had, since it's far more similar to them than to PayPal. What were those problems? Accounts differ.
The digital gold currencies had exactly one problem: they worked like cash, but without the necessary decentralization and untraceability. So, people started using them like cash, including for illicit purposes, but the services remained subject to centralized shutdown and seizure.
