It comes with unique upsides, eg: a central bank can’t inflate them, which for monetary assets, is a massive part of the valuation equation, eg: I can transact in them in a collapsed economy with no functioning money (ie venezuela). It comes with downsides, eg: if i get my bitcoin stolen I have less governmental power to find redress. But there’s a bit of a fallacy in the thinking that fiats are better from that perspective.
I would argue fiats are generally the same but the government has an additional option in that they can print more money to make specific people whole. Example a bank goes under because there was fraud, someone managed to pull out fiat through some means (pulling out cash for example). Because the government owns the press they can print more fiat to make depositors whole. This isn’t a magic bullet though, because you’re in effect imposing a monetary tax on the rest of the fiat saving community by doing so.
Outside of that solution, which isn’t a 0 cost one, the situation is identical to cryptos, you have to go through the courts to get your stolen holdings back. And if you lost them, it's no different than if your bundle of cash had gone up in flames or your stash of gold had gone down with a ship, you'd be out of luck. The massive thing cryptos provide is a digital savings mechanism that can’t be inflated by a central agent. If you’re a digital monetary saver, that’s a hugely compelling alternative which has a massive potential market base.