What if there were a terror attack like 9/11 financed with cryptocurrency or the US government decided that the risks to financial surveillance and tax collection posed by cryptocurrency was so high that it decided to launch a war against cryptocurrency like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it? Couldnt they just mount 51% attacks on every current and future cryptocurrency and freeze all transactions?
For example, ballpark figures to duplicate current Bitcoin network hashrate would be $600 million equipment cost and $5 million per day electricity cost.
Might a response be to create niche, private, underground non open source, restricted access cryptocurrencies? Could these gather enough network effect to have any utility without being vulnerable to attack?
The governments of the world will not make some naive decisions against bitcoin just because that certain event happened. Its like saying that after the 9/11 attack the government will shutdown all airports around the world because it will be used by terrorists. Instead of closing the airports and ban all airplane to fly into the air, the government has set-up strict security measures to avoid anymore attacks to happen. In this case of bitcoin if it will be used by terrorist to fund terror attacks the government will not simply shutdown bitcoin but they will do some investigation. There are huge investment at risk if bitcoin is being banned and the government is also looking at that aspect and so the possible move for the government is that they will establish another agency whose purpose is to monitor bitcoin transactions and will create rules and policies so that bitcoin will no longer be used in any illegal and deadly activities.