These aren't valid reasons - I don't want to get into a flame war though.
- Blockchain's main innovation is solving the double spend problem in a decentralized way.
- This means that self-custody is a new capability.
- Self-custody without a centralized authority is a big deal and can empower users (especially those in hostile countries or places with bad currencies).
- There's an extension of this with smart contracts and ethereum that allow for programmatic uses which can extend to completely transparent decentralized finance.
- zk-SNARKs allow for privacy to exist within the above systems.
That people don't self-custody because they don't understand how it works (and terrible UX) is a real problem and why most people should not be using cryptocurrency. They can still get screwed by regular collapses of fiat currency (and they do often), but they won't be helped by increasing their risk with something they don't understand.
The centralized exchange failures are independent of this and arguably a symptom of how centralized finance can cause problems because people don't self-custody funds. Your reasons dismiss the new capabilities they provide (self-custody, protection from government debasement of value, global use) and are an example of the type of HN response I'm talking about.
That isn’t really a solution. The confusion is the inability for most people to discern the words decentralized and distributed, which is the primary fraud of crypto. Centralized finance already has distribution in place just for security and continuity of business, so blockchain doesn’t really provide anything new there.
The only enticing quality of blockchain to finance is just elimination of transaction fees on a more open ledger.
- Blockchain's main innovation is solving the double spend problem in a decentralized way.
- This means that self-custody is a new capability.
- Self-custody without a centralized authority is a big deal and can empower users (especially those in hostile countries or places with bad currencies).
- There's an extension of this with smart contracts and ethereum that allow for programmatic uses which can extend to completely transparent decentralized finance.
- zk-SNARKs allow for privacy to exist within the above systems.
That people don't self-custody because they don't understand how it works (and terrible UX) is a real problem and why most people should not be using cryptocurrency. They can still get screwed by regular collapses of fiat currency (and they do often), but they won't be helped by increasing their risk with something they don't understand.
The centralized exchange failures are independent of this and arguably a symptom of how centralized finance can cause problems because people don't self-custody funds. Your reasons dismiss the new capabilities they provide (self-custody, protection from government debasement of value, global use) and are an example of the type of HN response I'm talking about.