This is the best explanation for crypto I've heard.
At the same time, his logic is flawed.
First of all, the game theory scenario he outlines, I may live through the first iteration of getting extorted. I won't make it to the second iteration as that leverage has now evaporated.
The idea of hedging using debt is not novel. That is essentially what Soros did in shorting the British pound. The necessary requirement is that there is someplace to convert that debt into an asset. In the crypto world, that is a race to zero. For instance, if every single currency/company/real estate asset is going to zero, at some point, there is no place to retrieve value on the debt converted to crypto. There has to be an outlet for value to be realized, not just held in a wallet. Otherwise that wallet experiences the same dynamic as the peso/dollar under hyperinflation.
Ultimately, his idea that there can be incorruptible software is flawed. The software is created by corrupt people, therefore, inherently prone to corruption.