I'm not knowledgeable in this area but isn't the problem "trust"? Trust is a risk. Probably a safe one but a risk nonetheless. If you have the ability to remove trust from the equation, why not pursue it?
In simple terms even if my bank was evil and occasionally abused my trust to steal my money it would still be cheaper to me than trying to use Bitcoin as money and paying the high transaction fees and suffering the long transaction wait times.
Sure perhaps if there was no one I could trust as an intermediary and everyone was evil and would steal large amounts of money from me then a decentralized blockchain based monetary system would be worth using. But as it is the potential risk of an intermediary abusing my trust is minimal to nonexistent compared to the very real expense and wastefulness of the blockchain based systems.
The same thing applies to almost all usage of blockchain. Sure it works, but trusting an intermediary just works better, and cheaper.
The question is, do the costs and downsides of cryptocurrencies outweigh the benefits of not having to trust a third-party intermediary? The author is arguing no, and for the overwhelming majority of real-world cases, I would tend to agree.
In the original paper, the way mining worked was by Proof-of-Work (PoW), which wastes a bunch of energy to make sure it's unprofitable to attack it.
There is research into mining without wasting energy by using alternatives to PoW, like Proof-of-Stake (PoS). I don't think there's consensus about whether any of them actually work.
I just mentioned, elsewhere in this thread, a couple major players in the cryptocurrency space who have proved to be untrustworthy. And a lot of people got burned in part because they believed the hype that removing the need for trust from the management of the "physical" currency is equivalent to removing the need for trust from the financial system itself.
That might have been true thousands of years ago, before the birth of finance, when everything really did run on just cash. Things are more complicated than that nowadays, though. Cash is such a small corner of the money supply in a modern economy. A few percent of the bits that people bother to try and count, and there's a lot more that goes uncounted. A distributed trustless public ledger for the cash doesn't really help with the trust issues for that stuff. Frankly, it only helps with the small subset of money for which I'm least worried about trust.
It's a moot point anyway - as has been said, bitcoin's a commodity not a currency.
Now, maybe we'll solve those problems in ways that don't requite more trust, but until then, cryptocurrencies will we far riskier than the existing financial system.
Effort vs reward. Maybe the reward is low, and the cost (e.g. in electricity to do the proof of work) is getting out of hand.
That cannot happen with a bank account.