> I hold that Bitcoin is not the cause of the scams.
I wish I could agree, as someone who remains eternally hopeful for crypto. Unfortunately, it's almost certainly not the case.
When half a billion dollars goes missing from the US banking system, we can follow the paper trail every time. Criminals never cash out at that scale, especially when they wire money digitally. There's always an account to find, a wire transfer to track, or another bank to contact. The centralization is their saving grace against these scams. When half a billion dollars goes missing from a DAO or someone's cold wallet, they're fucked. Those coins get tumbled and are almost certainly never seen again. The bad guys win every time, which makes it highly unattractive for any investment at scale.
Which raises the ultimatum of Bitcoin, and cryptocurrency as a whole: to hold, or not to hold? That is the question. Custody is the bottom line here, and there's no easy answer. The public will always prefer to have someone else manage their account, which removes their agency and increases the capability of private parties debasing the asset. The higher the demand, the further the centralization progresses. Unfortunately, that demand is nearly unlimited and the benefits of managing your own wallet are slim compared to the work and upfront knowledge it requires.
> It would reduce governments' ability to deficit spend, thus reduce the likelihood of financing armies that can be used for aggression... It would not eliminate wars entirely, but would make financing them very difficult.
This is completely false. There is not a single first-world country that would base the value of their currency on crypto, and having cryptocurrency exist as an independent fiat makes it extraordinarily easy to fund combat. Terrorist organizations could accept donations via untraceable coins and cash out anonymously. Extremist sects could fund themselves privately without scrutiny. Even in your idyllic example, it would only embolden countries like Russia to pillage their neighbors since they don't need to worry about the consequences of financial sanctions, being cut off from the world's banking system, or even worrying about the value of their own currency.
If anything, the world embracing crypto all at once would escalate the financing of combat to unconscionable heights.