So effectively you are saying that if people using an unregulated exchange that is not compliant they will lose money, and therefore the end of Bitcoin? Is that really what I just read?
I'm saying if Service A supports blacklisting, and Service B does not, and User recieves blacklisted coins from Service B, which does not blacklist, and tries to use them at Service A, they will not be able to.
I know what you mean. You think that people will avoid services that blacklist, but it's far more likely that people will voluntarily start using services that blacklist, because those coins can be spend everywhere, without risks of government seizure, failed payments, ending up in jail because guilt by association, etc
edit: and the bigger bitcoin becomes, the more services will start to comply to regulation or so self-censorship
Imagine that webshops want to start accepting BTC. Well, at the moment, those webshops are already regulated (in Belgium for example they need to have a physical address mentioned on the website). it is still a business. Most businesses want to comply. If a busines don't comply, it will eventually be shut down. So expect that 99% of the businesses will choose to use a regulated payment processor that blacklists/whitelists