I am not yet talking about forms of government (dictatorship vs democracy). I am assuming we talk about western democracies for now.
What makes you believe that the socalled western democracies are fundamentally different than dictatorships? Elections? If elections could change things, they would have been forbidden already. Democracies are disguised dictatorships, the free press is not at all free, censorship is increasing dramatically and existing laws are just not adhered to by the potentates, without any consequences.
So this discussion if blockchain can replace government is a virtual one, no government will ever abandon it´s power. You can see from the media releases, how aggressively the cryptos are battled by the elites and the banksters. The information war is already ongoing.
That is a very valid point your raising. I would still say though that democracies and dictatorship are not the same thing. I would claim that countries with democracies tend to have a much higher living condition for most people living in it. In central Europe for example the living standards are quite high, for most people. That does not mean that democracy is failing in some aspects and does also not mean that dictatorships are all only bad. But again, I think that democracies have a clear tendency of providing more value for more people. As to how much democracies or specifically elections are just a show, well that is the good point. But again, democracy is much, much more than elections. Its unions, courts, free speech, etc. Here in Vienna I am quite free in what I want to publish, which religion I want to practice, which language to speak, well even which job I want to take. I am aware that I am privileged, and not everyone here in Austria enjoys this privilege. But that might not be a problem of democracy but of people, of racism and nationalism. I work to change that, I want to share my privilege. And I am. So no, I disagree; Democracy is not just a fake dictatorship. But yes I agree, democracy only lives if people want it. And as long as so many people blindly follow - mostly big companies - democracy is weak. So yes, the true challenge is not to fight dictatorship as a model, but multinational companies. As they are the ones who profit most from us not focusing on them but on which political system we prefer. And yes, companies have a much more difficult job in democracies.