> Everything has a workaround, but if the state outright bans cryptocurrencies, the market will be severely crippled.

Like how they effectively enforced their prohibition on drugs and people working for cash-in-hand to avoid income tax and reductions in government benefits. Right.

It's always a cat-and-mouse game.

I don't know about how it is where you live, but where I live it's a lot easier to buy something that is legal than something that is illegal and most people pay most of their taxes.

Yes, exactly! The people who want to make money selling drugs have much harder time. It's possible but inconvenient (and in this case also dangerous).

Also, drugs didn’t have a legal competitor.

Now that marijuana, for example, is largely being legalized through the U.S., illegal sales of marijuana have completely vaporized.

Very few will opt to use crypto if a government has deemed it illegal if there is a legal alternative.

I guess there is value in crypto if your government and civil society is completely collapsing, but those blockchains are being sustained entirely by first world gamblers hoping to make a buck on cryptos prices increasing.

Once they realize that crypto has been reduced to (as its backers are now insisting) a currency for failed states, they won’t gamble in crypto and they won’t fund the enormous amounts of energy needed to keep a blockchain running.

Maybe a non profit can run a blockchain that people in failed states can depend on. But then the question arises, why would that non profit use an expensive technology like the blockchain as opposed to simply using a Postgres DB. Something which all the biggest crypto exchanges already do to provide immediate transactions because the blockchain isn’t fast enough.

Which brings us to the point that the only reason anyone is using the blockchain is because it’s been successfully marketed to lay people as this magical inflation defying, freedom providing magic money tree that only goes up in value, when in reality it’s at best a pretty terrible database with some niche uses.

To be fair, crypto has some value for illicit transactions and money laundering.

It's not obvious to me whether this value is greater than the mining costs or not. I think the value is in fact smaller and therefore the valuation is just a bubble.

Plus of course they mostly run their drug operations using USD, so if your definition of "uncensorable money" is that people are able to do something to a limited extent illegally if they can obfuscate their relationship with the publicly visible part of the transaction and avoid asset seizure, we had it before blockchains were invented...