[whatisweb3]

Three properties of cash make it tend toward centralization: physical size, difficulty of movement, and ease of access.

If you store a lot of cash in your home safe, eventually you will need more space - this is one reason banks exist. If you try to move a lot of cash quickly from one person or location to another, you will have a hard time - this is another reason banks and money transfer exists. If somebody breaks into your home safe, they probably will have immediate access to your cash - see smart contract wallets[1] and social recovery wallets[2] as an example of a more secure "crypto safe."

I agree that a concern in blockchain is that regulation and services may restrict users ability to withdraw to the base layer, see my other comment[3]. To me this is not a failing of the blockchain. It would be like governments restricting the use of internet or E2EE chat protocols - which is happening in some parts of the world - this does not mean the protocols have failed to meet their goals.

[1] https://www.argent.xyz/learn/what-is-a-smart-contract-wallet...

[2] https://vitalik.ca/general/2021/01/11/recovery.html

[3] https://news.ycombinator.com/item?id=32422921

[whatisweb3]

To add, cash is not neutral, it is tied to a particular state. It is a US centric view to say that USD cash is the base layer, rather than the EUR or GBP.