Email is decentralized, that means I can quit Gmail any time I want and use another service. Or even start my own.
Git is decentralized, that means I can quit Github any time I want and use another service to host my repositories.
Bitcoin is the same: I'm not locked into Coinbase, I can switch them for another service, personal wallet on a phone, a hardware wallet, or a combination of them. Move my coins to a company in another jurisdiction etc.
Just the very fact of how easy it is to switch, creates a pressure on your provider and makes them work harder.
US banking is not decentralized. I cannot simply take dollars out to some other service or wallet. Moving them takes a lot of time, there is no privacy, there is suspicious reports and interrogation everywhere, civil forfeiture laws and for another jurisdiction, I have to sell dollars for another currency which incurs fees, risks etc.
In short: Bitcoin is like Git, fiat money and banking is like CVS.
I'm not disputing that you can do those things. But I'm saying that when a particular provider is sufficiently powerful, they have the capability to make those options less appealing, either malevolently or inadvertently.
You could move your open source project away from GitHub, but if GitHub is sufficiently popular that most people don't understand how the patch system works in git, and hence don't know how to contribute without using the affordances that GitHub offers, then you will incur a cost by doing so.
The point I'm making is that if the majority of people using a decentralized system via a centralized wrapper, and if interaction with those people is a priority, then it is possible for the provider of that centralized wrapper to make it harder for you to interact with their customers without yourself using the centralized wrapper. The more they do so, the less value there is to you (the decentralized user) in the millions/billions of people using decentralized service X through centralized wrapper Y, because they're effectively unreachable unless you also use said centralized wrapper.
This can happen by continuing to use the decentralized infrastructure, but penalizing participants who aren't accessing the infrastructure through a popular system. Alternatively, it can happen by having the decentralized infrastructure co-opted, so even though the service to some extent interacts with it, most user interaction actually exists entirely within the centralized system.
I mean, it doesn't seem crazy for me to imagine a world in which (eg) as a Coinbase user there's some monetary advantage to receiving payments from Coinbase members vs the wider Bitcoin world. At which point maybe merchants want you to pay via "Coinbase Send" (or w/e this hypothetical service is called) rather than pure Bitcoin transactions. At which point, sure, Bitcoin is the underlying unit of value, but no-one is actually using Bitcoin transactions (Coinbase is just moving around their internal accounting DB records), and hence the fact that things are counted in Bitcoin is basically a historical artifact.
I have no idea what will happen. My argument is just that I don't think that it is impossible for decentralized systems to be functionally neutered when people mostly interact with them through centralized wrappers.
I'm a little concerned that over time, it is going to become more difficult and less private to move money out of Coinbase. Even now they ask you "where do you send your money? is it another website?" when you try to withdraw. This is unacceptable.
I'm talking about a whole community, not individuals. If some individuals are burned using centralized service, all others can learn from it and move elsewhere or choose more wisely. Not so with banking system which burns everyone and no one can opt out or compete with it.
Could you move more than the FDIC insured amount from Goldman Sachs? Or Lloyds in the UK?
Luckily, with Bitcoin, it's trade what you can lose. Keep the rest by yourself. Yes, there were some losses, but it's a trading platform. Somewhat expected.
If you don't believe me research what happened with the Swiss Franc recently. It has closed a lot of FX trading platforms from sheer losses [1].
This isn't limited to bitcoin — that's a naive and ignorant point of view.
One day blockchain.info stopped working for me (I think they mistakenly banned lots of IPs). And yes, I simply withdrew my money out of it. I just loaded my private key in a mobile wallet and swept the coins.
Apparently Coinbase now offers a multi-signature feature, so people could do the same.
Git is decentralized, that means I can quit Github any time I want and use another service to host my repositories.
Bitcoin is the same: I'm not locked into Coinbase, I can switch them for another service, personal wallet on a phone, a hardware wallet, or a combination of them. Move my coins to a company in another jurisdiction etc.
Just the very fact of how easy it is to switch, creates a pressure on your provider and makes them work harder.
US banking is not decentralized. I cannot simply take dollars out to some other service or wallet. Moving them takes a lot of time, there is no privacy, there is suspicious reports and interrogation everywhere, civil forfeiture laws and for another jurisdiction, I have to sell dollars for another currency which incurs fees, risks etc.
In short: Bitcoin is like Git, fiat money and banking is like CVS.