I sometimes think about Japan when I look at the blockchain industry.
Japan officially bans gambling. Yet anyone who has visited the country knows that pachinko parlors are everywhere. People put money into machines, win prizes, and somehow those prizes can be exchanged for cash. Everyone understands what is happening, even if the legal structure insists on describing it differently.
For a long time, I thought this was simply a contradiction. But the older I get, the more I think it reveals something important about how states actually work.
Many people see pachinko as a loophole. I increasingly see it as something else.
My view is that the Japanese state never faced a simple choice between allowing the Yakuza and eliminating them. The Yakuza occupied parts of society that governments often struggle to manage directly. They operated in grey areas, maintained informal networks, and, in some ways, helped impose order in spaces where the state itself did not always want to intervene.
That does not make them good. But it may have made them useful.
From this perspective, pachinko looks less like a contradiction and more like a political solution. If the Yakuza were going to exist regardless, then providing them with a visible and relatively controlled source of revenue may have been preferable to pushing them toward activities that were far more harmful to society.
In other words, pachinko was not merely tolerated. It provided a space where a force that could not easily be removed could operate in a way that was easier to observe, influence, and contain. Rather than eliminating the force, the state gave it boundaries.
Governments do not always eliminate things they dislike. Sometimes they decide that managing a force is easier than destroying it. A force that is given a place within society can be observed, regulated, taxed, and contained. A force that is pushed completely underground often becomes harder to understand and harder to control.
This idea keeps coming back to me whenever I look at Bitcoin and the broader blockchain industry.
Many people still describe Bitcoin as a challenge to state power. In its early years, that was certainly part of the story. Cypherpunks, libertarians, and later Bitcoin maximalists believed that money issued by governments was not the only possible foundation for a global economy. Some even believed that a form of money created outside the state could one day become a global standard.
But if we step back and look at what actually happened, the picture becomes more complicated.
Most governments did not embrace Bitcoin as money. They did not replace their currencies with it. They did not start paying salaries or collecting taxes in it. Instead, they allowed exchanges to exist, allowed speculation to grow, and treated cryptocurrencies largely as assets rather than currencies.
In other words, people were free to call Bitcoin money, but governments continued to run society using national currencies.
This reminds me of pachinko.
The participants call it one thing. The state calls it another. Both sides understand the reality, yet both sides continue to participate in the arrangement because it serves a purpose.
The rise of stablecoins makes this even more interesting.
For years, people imagined cryptocurrency as something that would compete with the dollar. Yet the largest and most successful stablecoins are built around the dollar itself. The more these networks grow, the more demand they create for dollar-denominated assets and, in many cases, for U.S. government debt.
Instead of destroying the existing financial system, parts of the crypto industry have ended up extending it.
The relationship looks less like a revolution and more like an accommodation.
This is where I think the AI story becomes important.
Most blockchain discussions still focus on human users. Investors. Traders. Speculators.
But the future may involve participants that are not human at all.
An AI agent does not have a passport. It does not have a bank account. It does not have citizenship. Yet it may eventually need to buy data, rent computing power, pay for services, or enter into agreements with other AI systems.
At that point, the question changes.
The issue is no longer whether blockchain can replace government money. The issue becomes whether blockchain can provide a shared economic infrastructure for entities that do not fit neatly into traditional financial systems.
Seen from this perspective, the long-term survival of blockchain networks may have less to do with ideology and more to do with utility.
The original narrative was about escaping the system.
The current narrative is increasingly about supporting the system.
The next narrative may be about providing an economic environment where AI systems can interact with each other.
Whether that future arrives or not remains uncertain.
But when I think about why blockchain has survived for so long despite endless criticism, I find myself returning to the same thought.
Perhaps it survives for the same reason pachinko survived.
Not because those in power fully believe in its stated purpose, but because it has gradually found a place within a larger system that has decided it is more useful to manage than to eliminate.