I see hype about how cryptocurrency frees people from a malicious government seizing your assets. When I read their arguments, I can't help but play scenes in my head of Nazi's peeling wealth off their victims layer by layer: first businesses, then homes, luggage, clothes, hair, family, lives, and then finally their gold fillings. That's extreme, but other governments have also just confiscated assets too.
Cryptocurrencies can help you bury your wealth in math, but it can't save your body or the bodies of the ones you love. Wealth paints a target, for bad governments and bad private actors. Crypto can be lower profile, more anonymous, and more portable - but it doesn't protect your physical body from the threat of fines, jail, or violence.
As long as you have a physical presence, you are part of the physical world - crypto doesn't let you opt out. Governments can control the flow of people and assets in their borders, and super powers can do so outside of their borders. With the support of powerful governments, cryptocurrencies can continue to thrive. But if major governments decide to attack them, the computers that calculate, the energy sources the power the computers, and the people that run or hold the currency are all vulnerable to physical world powers.
The US government's sanctions on Iran even change the behavior of criminals (a large ransomware firm moved their servers out of Iran so their victims could pay them without incurring liability under the sanction). ↩︎