Move deliberately, fix things: How Coinbase is building a cryptocurrency empire

I think of it this way especially as Fiat means 'by decree' or something like that.

It is very hard to be part of the traditional banks network. We can debate if it is better that there is much higher cost to entering but overall if the backbone is open then it should help innovation.

E.g. in my opinion most people don't want irrevocable untraceable transactions from their account as that increases fraud risk and (in their particular case) doesn't bring much benefit. Some do benefit from that, but it's a minority in the general population (but a large portion of early cryptocurrency adopters). Most people actually want something like a credit card payment that has a clear benefactor and the ability to recall the payment in case of fraud or other dispute. In other cases, the value is so low people are not willing to "pay" even very low price of convenience to gain them.

There are some people (and locations!) where there is large motivation to avoid various capital controls and possibility of government control, but for most people in first world countries it's preferable to have their money in the reach of local legal system rather than outside, as they'd expect (and need!) the legal system to protect them in case of disputes and have a low risk of it working against them. Of course there are all kinds of exceptions where people might desire a way to get undeclared money (say, to avoid making child support payments) but that's usually a sufficiently large motivation only if you want to defraud someone and most people actually are honest and pay what they're due.

Also, there are all kinds of trivial reasons why you'd want an institution to handle the trade - e.g. if you're investing, you'd need proper documentation for the crypto purchase so that it'd be tax deductible for the crypto sale, otherwise the whole sale could be treated as taxable income.

Ideology aside, as a random human being, why would I care about that? I need to buy bread at the bakery, I can use cash, my "centralized" Visa or my Bitcoin wallet, all other things being equal what difference does decentralization make?

And if it's solely about principles then I have bad news.

I think most people would agree that ideologically speaking if you value privacy it makes more sense to use Duckduckgo rather than Google search, yet even though DDG now offers a quality of service comparable to the big G it still remains extremely confidential. The friction to get from one service to the other is like 3 clicks in your browser's UI, yet most people don't care.

If 99% of people can't be bothered to ditch Google search in favor of something else even though there's very little friction, how can you ever hope to convince people to switch from Visa to a bitcoin wallet which is significantly less convenient and makes it easy to irrevocably lose your money? That's a pipe dream IMO.

It's the purest form of expressed preference - if people systematically give up A to gain B, then it's clear that they actually don't desire A that much and that they actually do desire B, no matter what they might say.

The same applies to Coinbase - all this implies that for many, many users decentralization is not a feature that's desirable enough to matter, that it's benefits are not noticable and not important enough to make it a serious factor in making their decisions; whatever "the decentralization vision" is, it's not relevant enough so that they'd be willing to give up other benefits to gain these of decentralization.

However, for the majority of people, obeying local laws (including AML/KYC regulations) is simply a part of their normal not-being-a-criminal life, not "bending over for the establishment"; they don't need anonymity and payment-censorship resistance and have no problem if their service provider complies with the law, so if the main advantage for some means of converting fiat to cryptocurrency is simply avoiding these regulations, then that provides no added value (and possibly negative value i.e. risk) to them, and they would reasonably not choose that.

There could be all kinds of non-banklike decentralized means of converting fiat to cryptocurrency, but there's some self-segmentation - if some seller would be obeying AML, KYC and IRS cash reporting regulations, then they might as well be banklike, since they'll be competing with banklike institutions, and if not, then yeah, that's a crime and would naturally be attacked by governments and avoided by a large portion of honest citizens. There are certain niche markets for whom it's important to be beyond the reach of the law, but that's not a need for most people, for most people even a decentralized solution would have to obey all the relevant KYC and other laws if they'd be comfortable in using it. A professional buyer/seller on localbitcoin is very much comparable to a smaller version of Coinbase with less reputation and thus needs to offer some advantage so people would pick them instead of Coinbase, and I'm struggling to see what that advantage would be other than evasion of regulations. It's clear that decentralization can help with that, but can it help with something else, something that a law-abiding consumer cares about?

One can argue about the details of regulation and licencing, but even if they would be relaxed to facilitate operation of small decentralized players, in any case the "above board" market will have to ensure that KYC (anti-anonymity), AML (filtering) and tax reporting for any large volumes, that is not negotiable; and the "underground" market that avoids that won't be attractive to most customers because of the risks involved by, as you say, governments attacking it and jailing operators.

Various DAG mainnets are launching or have launched and are operational today.

There are also serious technical flaws, but I think there's a good chance those can be addressed.