Yes but since crypto can be generated outside the borders they establish it can still outgrow them such that they have to remove those borders for the sake of their own continued survival. I think in this case they'll eventually build the wall around their city that enables the rest of us to lay siege to them.
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good point. But as a citizen you are then again prone to prosecution under its laws. So I guess anonymity is king?
In some cases but prosecutions take time and resources that are already hemorrhaging away. It seems unlikely that would be a viable option long term I think.