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.
First, that's a lot of totalitarian wet dream nonsense. But let's give it the benefit of the doubt and say that they can actually manage to pull it off.
You can still trade bitcoin with paper slips. Then all you'd need to do is hit a node and make the transfer. And an electronic wallet with VPN and cell connection is all you'd need and you can get those now.
lol, they'll just fork it and then tell the nodes to block all government IP addresses.