Let say that a country like Iran or Nk start using BTC to finance some of their activities or organization like "alqaida" ask ransom in BTC.
Will you continue to support BT system or you will cash out and leave ?
When any government starts using BTC, it is beginning of its end (govt's). Because BTC comparing to fiat is not inflatable by suits and comparing to gold, it is much harder to extract in order to replace with paper bills (what was done when we've been sliding off the gold - gold is just too heavy and expensive to store under mattress). Why is it bad for government to not have its own currency? Well, because you cannot shift huge amounts of productivity to whatever sector you want - roads, factories, military, space travel etc. You can only tax people. And this is alone limits government to such degree, that it cannot do anything seemingly "useful" for the voting population and will dissolve/collapse much quicker than you think.
Here are reasons for that:
1. Imagine you are a politician. Why would anybody vote for you? Only if you promise some vague benefits in form of "free" goodies. Of course, you'll have certain arrangements with the lobbyists, but on the surface you must provide something tangible for the voters. Or your career won't be sustainable. But how can you do that on taxation alone? If you raise all the taxes proportionally to your plan, then people will realize that the "free" stuff is a lie. If you raise taxes on the rich guys only, all of them will run away and your economy will suffer drastically (and this won't cover your costs anyway because you are not efficient producer). So inflation is what you need to magically borrow huge amounts of money from the future and spend today. But with BTC it's impossible and with fractional reserve banking on top of BTC it is also impossible because people will easily hoard and exchange in BTC.
2. Even if nobody is against taxes, taxes will not cover and sustain the costs. And since politicians are not professional producers themselves, their expenses will only grow over time, as amount of wasteful activities grows. So any governmental project will either collapse quickly before reaching any significant size, or govt will try to raise taxes to cover its costs. Raising taxes costs your place in the government. So even if government does not collapse, if it does any activity whatsoever, it will eat itself from within. And this will produce such an terrible smell as time goes by, that people will naturally refuse joining this club and there will be less and less voters to support any sort of activity proposed from the govt. Naturally, taxation and violent regulations will fade away over time.