How does dispute resolution work with blockchain?
It’s just that most people using blockchains haven’t needed or wanted this feature given its costs and centralization. Especially when transacting with smart contracts and digital assets: the domain asset you buy isn’t arriving damaged upon delivery.
If you really want this - it is not farfetched to assume a blockchain based PayPal replacement would offer some dispute resolution for special cases such as fraud, theft.
This feature is almost the entire value proposition of PayPal.
“I sent 1BTC where is my car?”
“Lel weak hands!”
In this cause it would be treated the same way as if you paid for the car with cash.
Dispute resolution refers to a buyer and a seller who used the platform to transact a good having a dispute over the payment. PayPal can arbitrate such a dispute (in principle - your mileage will definitely vary) and either refund the payment to a defrauded buyer, or protect a seller from a buyer seeking to abuse the system.
Blockchains are entirely unable to help with this problem, as they are only a payment layer and have no information about things happening outside the blockchain itself, unlike PayPal.
You can implement an escrow smart contract where a trusted third party controls when the money is released to the seller or refunded to the buyer.