> what happens to the core bitcoin business case once all known operators, exchanges and dealers have to abide by exactly the same regulations that govern conventional currency.

See... this is the sort of question that I love to hear. It's a shining example of the weakness and bias of the current system: it's only a problem to transact bitcoin if you're trying to exchange it to a gov't issued currency.

there's a chain of reasoning that starts at "if my grocer could just sell me groceries for bitcoin" and ends at "yeah, I guess property taxes will continue to need to be paid in gov't issued currency"

at the end of that chain is the catastrophic tipping point where hyperinflation happens. maybe we'll neuter the war machine when we get there... who knows.