The piece elaborates on the convenience and vulnerabilities inherent in the traditional financial system, which relies heavily on centralized institutions such as banks and securities firms. This reliance fosters trust in these entities but also exposes the system to risks of errors and failures, which are magnified when authority is concentrated. Bitcoin emerged as a solution to challenge the limitations of modern currency systems dominated by large intermediaries, proposing a decentralized approach facilitated through distributed ledger technology that offers 'mechanical trust' without the need for centralized validation.

However, in practice, Bitcoin and other cryptocurrencies have deviated from their intended decentralized vision. Many users view Bitcoin not as an alternative currency but as an investment asset, leading them to prefer centralized exchanges for their convenience over direct wallet management, which is seen as cumbersome. This shift has sparked an ironic twist, where virtual asset exchanges, in providing a central point for transactions, consolidate roles traditionally dispersed among various entities in the conventional market, embedding risks within a single intermediary rather than spreading it across different actors as seen in traditional capital markets.

Despite the extensive powers and responsibilities concentrated in virtual asset exchanges, regulatory frameworks to govern these entities remain in their infancy. This gap leaves significant risks unaddressed, highlighting the paradox of seeking decentralization while gravitating towards centralized control in the process of utilizing cryptocurrencies.