This is exactly what always makes me wonder:

a tokenized economy can indeed give a more distributed share of value, but if its value generation is still rooted in physical resource manipulation, it still is beholden to those that control the physical.

Blockchain and cryptocurrencies really are great, because they share the best of both worlds: they incentivize to be more productive, like a capitalistic system does, but they also allow for more fair distribution of the generated wealth. This is great.

The problem is that the crypto economy is still dependent on many factors: you need to have an electricity and an internet connection in order to be able to use it. Without any of these two you basically have nothing.

Apart from that, people still have basic needs, especially related to material needs: a place to live, something to eat and drink, and so on. Blockchain is a technology that is thousand layers above of these basic needs, and thus depends on them.

Although the above problems (or rather vulnerabilities) are not crypto specific, I am ware of that. Most of us no longer carry around too much cash, so without the electricity we would not be able to use our bank money as well. My point is that blockchain and crypto won't magically solve all of our problems.

so is partnership with traditional systems the way forward? are governmental forays into crypto going to make steps forward?

I would hope not, but I doubt a world without governments is possible. Any system has to have ways of controlling it. You could say that the biggest and most influential witnesses on Hive are also a form of government. We'd like to think we Hiveans are completely free of any top governance, but the fact is that most of us lack the knowledge to run and maintain the system.

So it all comes down to having a government that works smoothly and transparently, without authoritarian tergiversations—so that you can influence it, and if you choose you can opt out of its governance without consequences.

I think this topic was somewhat touched (although in a much more metaphorical and philosophical sense) by Dostoevsky in his story of The Grand Inquisitor.