HN user
I can see Binary Options have limited hedging value as compared to Vanilla Options. But it's incorrect to label it as a scam.
Most futures/options on "traditional" markets are settled in cash rather than physical delivery.
You're absolutely right, and it is related to the way in which disruptive innovation works.
Currently, the New York Times is to the news world what mainframe computers were to the computer world. People still pay money for mainframe computers, but only the people at the very top end of the market, given that a mainframe computer is feature rich and expensive.
Similarly, NYT is the most feature rich, extensive and wealthy masthead in the entire news world. People will continue paying for it in the same way that people pay for mainframe computers, but this doesn't mean they haven't been disrupted. The market for other news is far, far bigger and in the coming years will make NYT look like a drop in a vast ocean.