> Decentralized systems are amazing, until they aren't
No, they are not. They are expensive, they require responsibility. The UX is complicated. Most people shouldn't use it and will be better off delegating all this to someone else.
Thing is, it's not because something is good enough for most people that everyone should stick to it.
> what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?
This argument is stupid. With decentralization, there is no reason for your identity to be something singular. There is even less reason for people to think that one wallet should hold "all your money".
If you don’t have any friends you trust (which is probably a pretty common thing), then you can choose any other people/entities you do trust. If you want to rely on the government or financial institutions, you can request that they be part of your social recovery wallet process.
This isn’t common yet, but you can also build your wallet so it’s very difficult to steal funds even if someone recovers your private key. Building challenge periods into your transactions is trivial and lets you know if an attacker has compromised your key. You can then transfer all of your assets out with your recovery key.
Decentralized systems are amazing, until they aren't
(Even if you wanted to have a decentralized account recovery like saying you can have 3 friends band together and help you recover your account if you lose access, what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?...)