If you want to trust a conglomerate of folks who have a vested interest in keeping you small and poor to solve your problems, then there is no advantage. If you do not, then the advantage is exactly that it is not centralised.
Imagine a world tmr where bitcoin is everywhere. You ll have mining conglomerates in the cheapest electricity providers working as cartels to help each other and protect their interests (so can envision centralizing a blacklist of addresses they dislike, coordination on software version etc), de facto cartels of whales (like todays "billionaires" people describe as a collaborative force), and large lenders who concentrate capital and therefore still can buy out whatever they want (today called banks).
How do you think the blockchain solve any of that?
It's not rocket science. When you keep your wealth in monetary terms, you don't get to have it in physical terms. Money represents how much real wealth you could have if you spent it. It's deferred consumption. There is no real wealth in something that didn't happen.
If someone hacks into my account, my bank will likely reimburse me for any losses. There are controls in place to stop them from stealing it al. If someone just transferred it to their own account, I could use the courts to get it back. If I use a credit card to pay a scam, I can do a charge-back.
With cryptocurrencies, it's just "bye money". They're not going to fork for you. There's no logic to stop people in Russia transferring my entire account. It's too hard to find criminals to get any relief. It's just your fault for using cryptocurrencies and not having 100% perfect security.
Not to mention, the chance of my bank stealing all my money is nil. They'd be sued and arrested, and the FDIC would reimburse me anyway.
What if it's taken thorough wrongful civil forfeiture? Will you be able to afford to navigate the courts to get your assets back after they've been seized?
Cryptocurrencies don't have to replace all existing financial instruments to be a useful hedge. They can just be one tool of many to diversify your risk profile.
Especially consider that for people living outside the developed world, the risk of having your assets stolen through legal channels is going to be much higher.
You had to cover the "too big to fail" system.
On btc no.
Funny - I have never seen someone in the traditional financing system do that and not get caught. Closest things were ponzi schemes like Madoff (and he did get caught)
I have, however, heard of dozens of exactly this incident happening with cryptocoin exchanges (wallets, services, the most general term for all combined slipped my mind)
1. How much security do we need for this transaction?
2. For this block of transactions?
3. Can we have varying levels of security?
What we are ultimately trying to know is, is it profitable to double spend? If the answer is yes, then no one should be transacting, and anything they do transact is a gamble. If the answer is no, there's much less risk, and the farther the answer is no, the safer the transaction.
But we likely don't need as much security as we do now. In fact, it's very easy to handle at a user level.
A. Put the transaction on the blockchain.
B. Wait for additional blocks.
C. If your transaction is huge, wait for more additional blocks. Wait a week, a month. This is an important transaction. When the blockchain has not reverted for such a long time, finally do the transaction in the real world.
If you are transacting with yourself, you don't need any security at all. If you are transacting with a bar and the bar knows you, much like a tab, you don't need much security. If you are transacting with an anonymous person, you want high security.
So security is currently handled on a blockchain by blockchain basis, where it should be a transaction by transaction basis. What if you can't wait a month? Then you should put heavy fees on that transaction and it should be put in with other higher fee transactions.
4. How does security change with transaction size? Does it make sense to have limits?
5. How does security change with total transaction block size? Does it make sense to have limits?
6. When the coin price goes up, how does that change these factors?
7. When the mining reward in coins drops, how does that affect security?
8. When Bitcoin, in 100 years, moves to 100% transaction fee system, what happens to security? What would the transactions fees look like?
9. In 50 years when the block reward has been halved 5 times, either the price of Bitcoin moves to $1 million, or the security drops. Is that okay?
Bitcoin (and it's successors) are a decentralized solution to the double spend problem. If "decentralized" is a requirement, then a cryptocurrency can be an excellent solution. Other known solutions (like "just trust everyone") don't scale well (an understatement!).
If "decentralized" is not a requirement then there are other solutions to the double-spend problem.
Identity on blockchain beyond resolving zooko’s triangle (I.e. stably mapping pseudonyms to pubkeys) typically does not offer an advantage over (partially) centralized identity providers. E.g. putting anything related to government ID on a blockchain is pointless because you might as well have the ID issuer run a central or federated service.