> At which point the Bitcoin enthusiasts will say "but you can use a third party escrow service," which is true, and puts us right back into the same situation

> At which point the Bitcoin enthusiasts will say "but you can use a third party escrow service," which is true, and puts us right back into the same situation we are with PayPal. Bitcoin escrow doesn't work that way. Escrow cannot decide by itself to freeze your money. There are three parties in the transaction and you'd need the consensus of at least two of them to move the money. It's either the buyer and seller (in ideal transaction), or the escrow and seller or the escrow and buyer in a situation where transaction is disputed. The bitcoin escrow cannot behave like paypal do in this case.