What about the flip side, protection from the central bank? A central bank can restore your balance under fraud, they can also fraudulently steal your balance.

I'll make a very simple argument here, don't elect corrupt officials who use institutions meant to work for you against you. You may not like that argument and that's fine because I'm not here to argue that argument. Instead we're going to discuss what is you argument when the centralized cabal of your blockchain currency steals your balance? Outside of forking the chain and hoping it gets accepted you've got nothing. You don't get to choose who takes over and you have no way of holding them accountable.

Before you claim this is impossible go look up Steem. That chain got hard forked into Steem and Hive and of the two Steem, which experienced a hostile takeover, is doing better than Hive, the community fork. People who opposed Steem got cut from the chain. Now, if crypto was a real currency for the sake of stability one of the two forks would have to be chosen (otherwise you end up with fork after fork), who is to say your money won't just get wiped because you ended up on the wrong side of the fork? Who is going to give you that money back? The same way your money gets wiped whatever transaction you want to do can also get wiped if whoever controls the chain decides so.

And I'll reiterate. My point wasn't that FIAT currencies are the best thing ever, my point was that they're better than the blockchain alternative because you end up with all the bad of the FIAT currency with none of the good.