It’s harder to control your transactions when you have self-custody. It requires a higher level of coordination.
Bitcoin is of no use if you can't exchange it for anything tangible.
Zoom out to the "all" range on https://www.bitcoinprice.com/ and try to tell me with a straight face that you're looking at a graph that belongs to a stable currency. Heck, even just look at the last two years.
Part of the problem with Bitcoin in specific among all of these cryptocurrencies is that the Bitcoin community in particular is completely divided on whether they want a speculative asset or a functional currency. You can not have both. A currency that is regularly spiking in value to the degree that Bitcoin spikes (even a currency that spikes upwards in value) is not suitable for everyday transactions. A currency that doubles or even triples its value in 2 years is not a good currency.
The bigger thing to understand is that it is impossible to fix this problem with Bitcoin, because a sizable portion of the Bitcoin community doesn't want Bitcoin to be a currency. They want a speculative asset. In my opinion, that portion of the community is significantly larger and has significantly more influence than the portion of the community trying to create a currency.
Bitcoin is more akin to a gold like store of value than a currency.
Thats a nice theory, but in reality it is false/implausible to be able to control every single on and off ramp in the world.
Evidence: Nobody is currently controlling all the on an off ramps, despite the fact that I have heard the same exact argument that you are making right now, for literally over a decade.
I could cut your lawn, sell you an Xbox, or buy an old tractor completely with BTC. The government can cry about it all it wants, it can pass a hundred laws, or issue a thousand court orders. But at the end of the day, it has absolutely zero control if two individuals want to voluntarily exchange crypto with each other. We've already seen this play out with the illegal drugs trade and P2P file sharing. Spoiler alert: The government lost.
So really, in FreedomLand, you can work and get paid in BTC, but if FreedomLand only recognizes FreedomDollar as legal tender, then when you need to pay income tax, the government will charge you in FreedomDollar, and you need to exchange your BTC to FreedomDollar.
If you cannot or don't want to pay tax, then of course police will prosecute you, and courts will also require settlements in FreedomDollar. Nevermind you have millions of BTC or XBoxes.
Now of course, this "problem" would disappear if FreedomLand recognizes BTC as legal tender, but now FreedomLand government loses all monetary control, and then economic activity descends into chaos.
Even so, it’d have to be a global restriction on all exchanges which is more challenging to coordinate.
The thing crypto gives you is the capability to get your wealth out intact (at least whatever you had moved into self-custody). If you have fiat in banks frozen by the Canadian government your wealth is trapped.
You’re right if Canada banned Bitcoin it could influence the value of the coin. Similar to governments refusing transactions in rubles. The difference in capability is in the ability to move your wealth and that short of global coordination a global store of value (controlled supply, non-government etc.) is more resilient. The fiat comparison would be having the entirety of your wealth in cash in your house - obviously not viable (and good luck trying to cross a border with it).
Crypto is also more resilient to government meddling in currency production (this is often over-stressed in US, but is a real problem in developing countries where kleptocrats devalue the currency to steal the wealth).
It’s more similar to buying gold and having it on you, but with crypto you don’t have to keep it on your person to maintain direct control of it. You just need to know the seed words.
