[immibis]

The penalties are outside of the network. The penalties are that nobody wants to use a cryptocurrency with transaction filtering, when there are so many without it. Thus, the real-world value of the network token decreases drastically.

[verdverm]

There are also a bunch of people sitting on the sidelines, waiting for a regulated network.

Since all of these things are basically just printed money based on the faith of the people, and since ETH is number 2, I think it will survive centralization and regulatory capture, since most of the populace could care less about these things. It just happens to be that the ethos of crypto libertarianism isn't that important to valuing the network.

[immibis]

Those people are free to create their own network right now.

[verdverm]

The rules of the ETH network allow for this regulatory capture to happen as well. Decentralized governance means you may not get your way when the majority think differently.