Yeah as a proponent of bitcoin and cryptocurrencies I think it's important to recognize how they first established value. The only people that really had a self interested reason to use cryptocurrencies are people that were poorly served by the current situation.

Cryptocurrencies create a minimum coverage of ability to conduct financial operations, they are assets that a third party can not freeze, they are assets that a third party can not invalidate. Of course the first use cases will be illegal ones.

Can you explain something to me- say I wanted to transfer the equvalent of $5 USD to someone using bitcoin. How do I transfer that amount when one coin is worth $5000? If it requires having coin on an exchange is that not a 3rd party? And would it be impossible for them to freeze coins in that wallet?

So this is Bitcoin 101 and you should really be reading up on it, but basically:

Bitcoins can be divided, the smallest fraction is called a "Satoshi" and is a millionith of a Bitcoin (So a cent is 500 Satoshis). The blockchain is a peer-to-peer, which while technically 3rd party, is not something that "you have coin on". The blockchain is basically a cryptographically signed ledger that says a certain public key has this much bitcoins. If you have the matching private key, you have the coins. Exchanges are mostly used to exchange between Bitcoin and some other currency, like US Dollars or another crypto currency.

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