The 1% analog is redundancy in traditional currencies. Outside the developed economies a huge chuck of transactions is still done with physical cash.

I imagine it would be a lot more convenient to have some hard currency at hand when fleeing a conflict zone. One might need to bribe border guards at some remote location with unreliable (or non-existent) internet connection, to get to safety.

Sure, holding crypto doesn't prevent anyone from also holding physical cash.

Both are quite valuable tools to defend oneself. They have different balances between risk, convenience, liquidity, anonymity.

Genuinely curious, what happens if the country instead firewalls/cuts off their internet from the outside world, how does Crypto handle that?

Because that is essentially what has happened now with the SWIFT sanctions.

SWIFT is not the only way for banks to communicate.

Cutting off internet from outside world is much more drastic measure, highly unlikely to happen for a prolonged period of time.

Even if it does happen, you can still use telephone lines to connect. [1] [2]

[1] https://www.dw.com/en/european-activists-offer-dial-up-inter...

[2] https://www.france24.com/en/20110201-speak-to-tweet-egypt-tw...