Government can shut down the cryptocurrency experiment any time it wants. Government money creation worked because government insists you pay taxes in their money and has people with guns. Crypto exist as long as governments want it to, and no longer.

There is a great deal of triumphalism in the crypto-world, since it has made a bunch of people rich. People who get rich virtually always think it is because they are great people. They feel empowered and so on. (And, according to the research, generally become selfish jerks with a reduced empathic response.)

The simple power relationship is this: any government can put the hurt on crypto and largely shut it down in their country simply by criminalizing it and having their taxation folks watch the entrances and exits.

Crypto can be badly hurt by three governments: China, the EU, and America, in exactly the same way. Crypto is arguably in violation of a host of security laws as it stands, and could be made more illegal any time a regulator or government chooses to.

People with guns beat people with cryptography. Code is not law, and the people who thought it was were fools. Law is what people with something approaching a monopoly on violence in an area say it is, and nothing else.

Peer to peer financial networks are a good idea: cutting out banks for exchanging money is a good idea. (Bitcoin is a bad way to do both, but that’s not this article. Other coins do a better job.)

But it must be allowed by those people who control organized violence, and if they choose not to, all your technical wizardry will not save your networks, even if some crippled black web version remains.

Nor is money creation quite what you think it is. Money exists mostly because powerful people want to be able to coerce the non-powerful thru taxation or debt-farming them.  Other benefits are incidental if appreciated .

That doesn’t mean that crypto can’t, in theory, grab money creation from banks (though co-option is far more likely). It means that, like banks, whether they can do so rests on whether they can cut a deal with and prove their usefulness to state sanctioned organized violence.

This is all it is ever about.