Multisignature transactions are a thing. This isn't your grandfather's symmetric key crypto.
Seriously, you're underestimating a motivated government's ability to use violence to either prevent transactions (by taking some of the multisig parties out) or to coerce a transaction (by applying multiple hoses to multiple people).
Say they capture your family. Would you not make a transaction to save your family? If you didn't they'd just take you out. Heck, a motivated government might just take you out after anyways! See how your "coins" are no longer your biggest problem under an authoritarian regime?
In the face of the KGB, you wouldn't be saying "but your violence can't solve this math problem" for very long. Not without that tongue. How many fingernails does a man need anyways? Trust me, that math problem's getting solved. With hoses. Real fast.
This is one of those conceptual exercises that falls right over.
Hardware security systems also permit such things, in more limited circumstances.
The state's capacity for violence is finite, and is scoped by their legal and physical jurisdictions. There is no state, as yet, that can wield unlimited violence throughout the same scope as the uncensored internet.
One man, can tell the KGB, to extract fingernails until the money moves or is no longer capable of moving.
> There is no state, as yet, that can wield unlimited violence throughout the same scope as the uncensored internet.
So a sufficiently motivated state censors the internet. EZPZ. Half the world's already doing it.
Your problem isn't the money, your problem is a tyrannical government. It can and will do whatever it takes, and by virtue of being a large group of people vs. you and your, well, fingernails, no amount of math is going to resolve this situation in your favor. The only thing you can actually do to improve your situation is topple the government. And once you do that, you don't need crypto, do you?
The analogy you should be looking at is the printing press, because it broadened the scope of such markets; what a person of higher literacy communicates is illegible to the lower. And such is true of a system of account that renders a larger scope of transactions illegible. The possession of great wealth itself is a concept that assumes a top-down vision of value; the phenomenon of being robbed for cryptocurrency is mostly reflective of the new being imitative of the old. But if they're all tokens, and anyone can make them - well, then, that means we increasingly don't have a man at the top. If the scrip you pay your police doesn't buy them anything at the market, they aren't going to be very motivated to take out fingernails for you.