the state is just a bunch of people doing what they know to be good, a little education and an investment in Bitcoin will help align self interest with public good and heal any perversions we see today.
Could not disagree with this more.
Gold bugs have spent 100 years knowing they are "right" and waiting for everyone else to education themselves understand history and see the light. Never happened.
In the meantime the state resorted to banning private possession of gold for almost 2 generations in order to break the public's view of gold as money. The state will fight Bitcoin just as hard.
Yes, they will fight tooth and nail. The question is what are their viable strategies?
Passing a law saying "you may not accept bitcoin as payment, under penalty of 10 year prison sentence", would pretty much destroy bitcoin in that country. There's no ecosystem when no law-abiding person can use it at all.
However that's not the end of the story, other countries' bitcoin economy would continue to flourish at the expense of the iron-fist country. It's possible that pressure might open things back up. I think the equilibrium is where some fraction of the people use bitcoin, and the rest won't be bothered due to regulations and simple lack of demand. The drug war is similar - drug policy doesn't really stop anyone from smoking a joint, but you have to want it a little more, compared to it being freely available on every corner. The government just selectively enforces the law for their benefit (disproportionately on minorities). Same will happen with bitcoin. They'll just create a multi-billion-dollar governmental department just for enforcing "bitcoin crime".
I think the "hyperbitcoinization" scenario is sheer fantasy. The vast majority of the population do as they are told, if the tv says bitcoin is for terrorists, they will not be interested. Only when those people die off and are replaced by bitcoin-savvy youth, might there be a chance for a takeover.
If the TV says Bitcoin is for terrorists but both my friends & neighbors use it and have doubled their wealth in the span of a year then I might just consider it.