>>In the case where criminals profit from harm, the criminals may personally experience utility from Bitcoin, but the total net utility is negative.

In the context that you made the argument in, which is consumer demand for cryptocurrency, the type of utility we're talking about is utility for the user.

>>In the case where the exchange in question is low harm, we generally see society evolving toward legality. E.g., marijuana has been declining in illegality, so the need for evading state detection declines too. There are now multiple marijuana storefronts within walking distance of my house. Bitcoin doesn't help them.

Marijauna stores would benefit tremendously from a widely used cryptocurrency. Legal marijuana shops have enormous difficulty getting bank accounts.

The government pressured payment intermediaries into stopping donations to Wikileaks a few years ago. Cryptocurrency was a vital lifeline for the organization during the blockade.

Craigslists recently shut down its personals section, due to FOSTA. Adult entertainers are having their PayPal and Patreon accounts closed. Venezuela's economy has been totally destroyed by its government's interventions. Areas of China are being turned into an Orwellian dystopia: https://www.hrw.org/news/2018/02/26/china-big-data-fuels-cra...

Your claim that ways of circumventing centralized control of financial transactions is growing unnecessary is totally unfounded.

>>I suppose you could say I have an investment in government, which I call "being part of a modern, civilized community".

So to clarify, you're not part of any of the groups I mentioned earlier?

>>But there's no particular reason to think 80-90% of people will be excited about risking IRS penalties and jail time for tax evasion or money laundering.

Filesharing is used by millions of people, and it is illegal. There are many countries in which taxes are widely avoided, so we also know that happens. In some countries circumventing govermment control is a matter of survival.

Cash, by its very nature of being fungible and untrackable, makes anti money laundering laws almost useless, and cash is used the world over.

Your idea of a global surveillance state to enforce taxes on private transactions and to track criminals as the only way to coordinate the use of resources and prevent crime is not the only future open to mankind, and you yourself obviously don't believe it is or else you wouldn't put so much effort in trying to discourage the use of cryptocurrency.

We could go to a future where law enforcement needs a warrant to know the content of a transaction, and where taxes are levied on immovable property, instead of being tied to private economic activity, and a strong civil liberties and economic argument could be made that this would have total net utility.

And it's not just circumventing centralized control by governments. Private financial intermediaries track their users' financial activity extensively.

On top of all of this, simply having a mechanism to transfer value electronically through an immutable protocol provides utility in avoiding rent-seeking by large trusted third party intermediaries who've attained large network effects.

The idea that there is no conceivable utility in avoiding payment intermediaries that can censor/surveil you, except to commit crime, let alone crime that is socially harmful, is preposterous.