Sorry to be a pessimist, but they can just say anyone transferring bitcoin to another party without going through a KYC compliant intermediary is money laundering and then send the swat team out to whatever ip they can track down via NSA whatever. Game. Set. Match. Banks win as usual, all done. They'll take it down just like Pirate Bay, etc.
Can someone tell me how people think the cryptonerds can win here? I'll be over here munching on my popcorn thank you.
I think you have unintentionally predicted exactly what will happen.
The Pirate Bay may still be up, but it's a shady corner of the internet.
If businesses can't legitimately use BC, it doesn't matter if I can still do shady things with it.
At the same time, every person even in the government or banking sector, would love to keep his earnings and bribes in a secure highly-liquid asset Bitcoin is.
The war on Bitcoin won't be about forbidding usage, but about seizing bitcoins from mortals to rulers. And eventually it will displace fiat currencies and take out a lot of artificial power that is created via money printing. Then this war will be over and people can back to daily peaceful life and work. (Yes, wars will become completely unsustainable due to lack of debt-based funding.)