They said there are no real uses of this technology outside of speculation and laundering and your response is that tools for speculation and laundering are useful. That's not really what the argument is here.
The argument is that this technology is being touted as diverse and widely popular when it in fact is not and mostly only used in circular use cases involving itself.
AML implementation is a poor and misapplied user experience that is usually done as an excuse to prevent money laundering. Many services apply it arbitrarily with no scrutiny and use it to steal users funds. Unclear regulations per country dont help and unscrupulous actors take advantage.
Onchain and noncustodial services are either exempt or function autonomously, removing this particular duty of the state. They also typically have unlimited amounts that you can move, compared to arbitrary monetary amounts that centralized systems impose. “DeFi” efforts are being made to make the experience of using onchain noncustodial services as fast or faster than offchain custodial services and a lot of progress has been made towards that.
Regarding the actual money laundering everyone’s afraid of, even the strictest regulations never actually prevented that while taxing all business and financial institutions. The Patriot Act wouldn’t have flagged any of the 9/11 transactions, HSBC still laundered billions for the actual cartel, minorities go to jail for accidentally using over $10,000 in cash, and even Al Capone could have passed the KYC part of AML regulations, so who is this for? Any way its going to be moot and already is for a lot of people.
A popular asset management system is this: https://www.tokensets.com/
Maker and Compound allow borrowing backed by collateral.
Decentralized exchanges include the various DEXs and Uniswap.
All of these get substantial usage.
Not a lot of traction yet, but definitely vibrant.
If you are an ancap, more power to you, but it's useful to have arguments that are persuasive to the huge majority of people who are not.
Everyone should have the right to privacy, electronic transactions are no different.
Of course, you can use the good old "if you have nothing to hide then you have nothing to fear" argument, which has already won over...
Privacy is important though, doesn't matter if it's financial or not.
In the future, should more serious privacy options come to Ethereum, then it's important that everyone should be entitled to use it, just like we are allowed to use end-to-end encryption today.
Regardless, that still doesn't mean the electronic privacy is the same as crime.
Or, would you be willing to hand over every bit of electronic information about you over to the government?
Oh, you don't want that? Well, what do you have to hide then?
That's a bit of a stretch isn't it? Other than speculation and money laundering, I don't think any dapps have gained any traction at all, let alone a vibrant ecosystem.