All the scams and fraud don't help. I don't think UX presents the main problem. People eventually saw through the hype and figured out that crypto doesn't add any value except for criminals.
Premining was a massive heist scam at the beginning of the ledger, available for all to see the evidence of it. Bitcoin's legitimacy hedges a lot on that promise that those early wallets are inaccessible. There's never any certainty on that promise, especially in the way Satoshi is a mythologized figure that maybe never existed or maybe is one of a handful of known scammers claiming to be him. It shouldn't be a shock how many ICOs were premining scams when that lies at the heart of Bitcoin.
I feel like even the name "blockchain" is a form of fraud at the center of cryptocurrencies. The data structure is clearly a Merkle tree. "Forks" in the chains aren't an accident or an aberration, they are a natural shape of the data structure and all the handwaving and "yeah, but Proof of Work and coalitions of miners and majority ownership" sociopolitical contrivances don't fix the technical fact that these things are trees, always have been, and always will be. (How many Bitcoin forks are we up to being tracked in the major exchanges now? 6 was the last I counted, months back. And at least 3 Ethereum forks. Those numbers aren't "accidents", that's not an aberration from the norm, that is clearly the norm and the earliest forks were all long ago enough now that most people have only known them as trees and never actually "singular chains".)
Again, I know I've got a very cynical view of all this, and I know not everyone agrees with my views on the above, but they say scammers can often recognize their own, and when so many scams have happened on top of cryptocurrencies, it is very hard not to wonder: When even the technology and terminology resemble scams and frauds, is it any real surprise how many scams and frauds keep getting run on top of them?
I have been thinking about the fedi lately and how it is missing single sign in which would enable all sorts of supporting services. I used to think “web3” was beneath contempt (scams) but the idea of “authentication first” is appealing to me now although fundamentally a decentralized auth system means being responsible for cryptographic keys which is just terrible from a UX perspective.
It seems the entire industry is filled with builders who are just dog-fooding janky products to each other under the guise of traction.
Look at how end-to-end encryption of email has not caught on although it was possible in the late 1990s, the horror of gpg, or how the NSA gave up on nerfing encryption algorithms because people will always screw up key management. (Che Guevara might have lived to lead another revolution if he hadn’t misused his ‘unbreakable’ one-time pads.)