Just like the fiat banking system, where monies hardly lost because there is always provision for next of kin who will claim such monies in the case of demise.
You are mistaken. You are thinking about ACCOUNTS with businesses. You are NOT thinking about MONEY.
If you have a $100 bill and you light it on fire and burn it... There is NO provision for you or your next of kin to claim that money. It is permanently lost.
If a thief comes into your house and finds your wallet and take all the money out of it, you've permanently lost it to the thief. There is no provision for you or your next of kin to claim that money unless you can find the thief and make him give it back to you.
If you invest your money in a business, and that business ends up in bankruptcy, theree is NO provision for you or your next of kin to claim that money. It is permanently lost.
If you store your money in an insured account with a custodial service (such as a bank account) and you lose your password, then that custodial service can verify your identity (or the identity of your next of kin) and provide access to that account.
BTC should have a similar feature.
Bitcoin HAS a similar feature. If you permanently lose your bitcoin, it is just like permanently losing your local currency.
If a thief (or hacker) takes your bitcoin, it is just like a thief taking your money.
If you store your bitcoin with a custodial service (such as an exchange), and you lose your password, that exchange can verify your identity (or the identity of your next of kin) and provide access to that account.
