Yeah but it's not magic. If they manage to control more than 50% of the existing hashrate, they can do whatever they want to the blockchain. There could still be an uncompromised chain running on the cpu power they haven't seized yet, but the smaller that group becomes, the less secure it will be and the easier it is for fraudulent chains to start popping up without the ability to distinguish them from one another.
It's extremely extremely difficult for governments to control bitcoin, but not impossible.
lol, they'll just fork it and then tell the nodes to block all government IP addresses.
That's if we assume they government stockpiled enough GPUs to do a 51% attack. More than likely we'd just see them seize and regulate GPU farms. Force the owners to leave backdoors on them, and cut power to noncompliant miners and auction rigs off to compliant ones. Maybe a drug-war esque "war on crypto", scare the smaller miners out of participating with harsh prison sentences. Regulate the sale of GPUs, force people to add serial numbers and register them with the state. Wanna own more than 3 graphics cards? You need a class C license. 15 hour $3000 course in legal compliance and the dangers of unregulated crypto.
If the uncompromised nodes do a fork, their chain will be a lot slower and less secure than the other one, at least depending on how bad the crackdown was. And unless someone comes up with a recipe to make bootleg GPUs in their bathtubs, it would be hard for the old chain to recover. All transactions with original bitcoin will have to be done in secret, as anyone caught using it would surely be charged with a felony. What kind of legitimate merchant would use such a coin for their business?
I don't think this will happen any time soon, especially because it would require international cooperation. But if they really really really wanted to control our stupid internet coins, they absolutely could. Force and intimidation triumphs over all.
Bitcoin-styled crypto is specifically designed to be anti-regulatory. The blockchain records all transactions and is designed to be at least partially anonymous (fully anonymous if you know what you're doing). It's designed to be non-changeable once a transaction is recorded.
Governments don't like this because they want to control the currency because controlling the money is real power.
Having currency that defies regulations means that you can commit to transactions that can't be traced, can't be taxed per transaction, can't be identified to a specific person (if done correctly). That eats into tax revenues and that's what this is all about: power and taxes.
When the US government made it a requirement that exchanges act like banks and require proof of identification, other ways to exchange bitcoin anonymously sprung up. They want to be able to reverse transactions so that they can erase anonymous transactions that didn't go through their channels. It's not a government issued currency so it's none of their business.