TL,TR people can be coerced into stuff. None of it unique to crypto. What is unique to crypto is even if a transaction can be traced, there’s nothing anybody can do about it. That’s the value of crypto, the ability to circumvent capital controls and confiscatory wealth redistribution. schemes.

So, there are some assumptions in your thinking – that the states are just going to let people have and use crypto. They are going to discover people using it, and they will use the records to convict them, and seize the crypto. Who was the biggest owner of bitcoin in the world? US Gov, after seizing everything associated with Silk Road. How did crypto protect the assets of people involved there? It did not.

Governments love crypto on the downlow. Even better than credit card virtual money. And this doesn't even count all the fraud, pumping, etc that's happening between fiat value in relation to crypto value – which is what every end user needs to do, to get goods and services out of the network.

> You can’t access USD for anything at billion-dollar scales without access to SWIFT

You are wrong because, its not about dealing with USD directly, but denominating things in USD. You can swap into USD deposits from any currency as long as currencies around the world float agaisnt another.

> You’re using jargon to paper over a very real issue

Your ignorance of basic concepts in the cryptocurrency space and how decentralized protocols (can) work will not paper over the reality that there is no all powerful actor that can stop anything that happens on chain unless the protocol/chain was explicitly constructed for such.

> So, no, there’s no evidence here that crypto can escape a government and scale up

Its continued existence is evidence enough. Since 2008 with ever increasing intervention by governments around the world it has thus far avoided such and usage has grown (as well as adoption by major banks and a few minor governments around the world). Diktats mean nothing to decentralized protocols except for short term bottlenecks against those who are least informed how things actually work, who would rather imbue governments with magical powers at being able to do things.

Maybe it’s not evidence for you, but your perspective of what is evidence does not matter for those who use the tech everyday and have their assets on chain. If governments want a say in defi, they will need to construct protocols that people will want to actively use, just like everybody else.

> In other words, all the feds have to do is prosecute about 1 out of every 200 people involved, and they can drive something out of public markets. That doesn’t bode well for the future of crypto.

1 ICO/IDO does not map to 1 person, you can have a bunch of anon’s be behind ICO/IDO. People have been projecting the their doomsday scenarios on cryptocurrencies since its genesis (and even before that with cryptography export controls in the 90’s lol) and ignore that its centralized predecessors were easily stomped out. And even if the government decide metadata drone strike 1 person (with a bunch of collateral damage lol), it does nothing to the protocols already deployed on chain that are decentralized in governance.

MPAA had to learn the hard way (and still fights it tooth and nail), that just because you decided to waste resources going after individuals, in no way shape or form threaten the long term adoption usage of p2p and decentralized technology. I hope governments continue to waste more and more resources with their sisephean efforts to controlling such.

"1-3 wont matter of those will matter for decentralized exchanges/protocols/stablecoins (esp those with no blockable assets like USDT/USDC or overcollateralized to minimize that risk), cash for token on/off ramps that have always existed, and crypto for goods/services (which is very popular in some EM countries) without leaving the blockchains."

You can't access USD for anything at billion-dollar scales without access to SWIFT, because at that scale, you're dealing with dollars that only exist electronically in the federally controlled banking system. If the USG pulls the plug on Kraken and Coinbase, you're back to making small-value exchanges for Amazon gift cards. On/off ramps with no SWIFT access can't handle something the size of the US economy and aren't in any way a threat to the USD.

You're using jargon to paper over a very real issue: when you operate at scale, you're not hard for federal regulators to find. At its peak, total crypto volume in Venezuela was about $300m for the year. This is less than 0.1% of Venezuela's economy. So, no, there's no evidence here that crypto can escape a government and scale up, not even one as incompetent as Venezuela's.

"There have been about 5700 ICO's and sec has only gone after 27 between 2016 and 2020."

In other words, all the feds have to do is prosecute about 1 out of every 200 people involved, and they can drive something out of public markets. That doesn't bode well for the future of crypto.

Secondly, as the central banks of the world's major currencies continue to print tens of billions every month, how long before confidence is lost in those currencies? How long before the markets realise that the debt can never be repaid and interest rates will never return to historical norms? Investors will be looking elsewhere to protect their wealth, never mind seeking a return on investment.

1-3 wont matter of those will matter for decentralized exchanges/protocols/stablecoins (esp those with no blockable assets like USDT/USDC or overcollateralized to minimize that risk), cash for token on/off ramps that have always existed, and crypto for goods/services (which is very popular in some EM countries) without leaving the blockchains.

There have been about 5700 ICO's and sec has only gone after 27 between 2016 and 2020. Initial DEX Offerings (IDO) have largely replaces those for tokens on chains (obviously nft hype has largely outshadowed alot of the newer defi stuff going on now).

If a DAO's funds are controlled by decentralized governance, and one does not give up control over their individual private keys, it will be impossible to seize funds outside of extraordinary means that are available to any actor in the world (i.e hacking the protocol which gets increasingly harder due to the constant attacks and audits for largest protocols, or buying out existing governance token holders).

DAO's in name only that are incorporated and centralized exchanges have the most to lose, and decentralized exchanges and protocols will get their users if those are shut down.

1. Declare cryptocurrencies to be securities
2. Require cryptocurrencies to pass regulatory hurdles to be listed on domestic exchanges.
2. Introduce KYC/AML requirements to quarantine shady offshore exchanges like Binance from regulated, domestic exchanges like Gemini and Coinbase.

People's ability to use crypto to evade capital controls, tax authorities, etc, at scale evaporates, because their ability to exchange crypto for dollars is now limited to the black market.

"capital will exodus from the global bond and fiat bubbles over into the anti-fiat world"

Capital is still paying taxes, issuing securities, and settling accounts in fiat, because they're required to by law. You greatly, greatly underestimate the state's ability to seize your property and put you in jail if you're annoying it too much. Remember ICOs? That was supposed to be the hot new thing, and after the US government put a bunch of people in jail for securities fraud, well, you haven't heard much since, have you?