The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:
1. Too slow transaction times for general use.
2. Too bloated block chain for mainstream adoption.
3. Having to store coins "under the mattress" is a step backwards.
4. Proof of work will lead to too large transaction fees.
5. Proof of stake leads to the rich getting richer.
6. Lack of government support prevents mainstream use.
7. Trading against ordinary fiat currencies causes volatility.
What does this mean about "under the mattress"?
That's the biggest problem! Cold storage. An absolute nightmare to have manage oneself even for a crypto-savvy person. Some people may enjoy storing private keys on paper etc, but those are the fanatics. For ordinary people the mess with having to secure the coins oneself is a major step backwards, into the Dark Ages.
Hmm, I'm not sure I agree. I guess I'm a "fanatic" because I printed out a paper copy of some keys to be safe from a computer crash but I don't know why that's so crazy. What do you do to secure anything else on a computer that's important to you? I'll let you know what I do, I make backups and store them somewhere cool and dry. Here's the LOCKSS rule: lots of copies keeps stuff safe (a librarian told me that). As far as security, again, isn't this already an issue that's bigger than cryptocoins? Here's some rules of thumb: don't run windows, don't install programs you don't inspect, encrypt sensitive material.
I don't see how these issues of backing up and securing data are relevant to crytpocoins specifically. They seem to me like general issues related to keeping sensitive/important information on a networked computer.
I'm looking at it in a long-term perspective. As a comparison, to have to keep one's computer safe oneself is also incredibly old tech from that perspective. The usability of information technology will become much better. Even having to install apps on a smartphone is very old and cumbersome tech.