At the core of 'the state' is the coercive threat and use of violent
force. If 'the state' did not reserve for itself the use of force it
would fail. In general people may appear to willingly comply with the
requirements of the state but that is either because:
* they would act in that way regardless, (they would generally not want to transgress against other people's property), or
* they would act in a different way to the edicts of 'the state' but do not because of the prospective repercussions, or
* they believe it is moral to comply with the edicts of 'the state'.
'The state' is central to, sets the tone of, modern human society in great part. Because people individually agree that employing the use of force is only moral in defence of self and property and agree that groups of people have no more right to employ force than they do individually, there is an unanswered dichotomy, a dissonance, between the circumstances when an individual can morally use force and when 'the state' makes use of it. There is no moral justification for 'the state' to use force outside of those same perimeters of an individual's moral legitimacy.
When 'the state' employs morally illegitimate violent force it attempts to set itself apart from human morality and instead endows itself with a false morality to break this code. Without violent force at its disposal 'the state' ends. 'The state' is nothing without the use of violent force. 'The state' is nothing but violent force. 'The state' is violence.
* they would act in that way regardless, (they would generally not want to transgress against other people's property), or
* they would act in a different way to the edicts of 'the state' but do not because of the prospective repercussions, or
* they believe it is moral to comply with the edicts of 'the state'.
'The state' is central to, sets the tone of, modern human society in great part. Because people individually agree that employing the use of force is only moral in defence of self and property and agree that groups of people have no more right to employ force than they do individually, there is an unanswered dichotomy, a dissonance, between the circumstances when an individual can morally use force and when 'the state' makes use of it. There is no moral justification for 'the state' to use force outside of those same perimeters of an individual's moral legitimacy.
When 'the state' employs morally illegitimate violent force it attempts to set itself apart from human morality and instead endows itself with a false morality to break this code. Without violent force at its disposal 'the state' ends. 'The state' is nothing without the use of violent force. 'The state' is nothing but violent force. 'The state' is violence.
This violence, which is 'the state', is the cause of enormous harm that runs through human society as a virus. 'The state' breaks the moral code that is the foundation upon which a harmonious human society should be founded. The overall effect of this violence at the core of 'the state' is that the infection spreads through human society and especially manifests in weak points within the social order.
So how would a stateless society deal with crime? In a fully functional stateless human society crime would be vastly reduced as a result of having taken the use of faux legitimated violence out of the core of society. There would still be crime one can suppose, human nature remains and part of that may be for some to still act immorally, against others and their property, if they can get away with it. So assuming there would remain some crime in a stateless society it would need to be dealt with or the immoral people would simply be unconstrained and encouraged.
The lesson to be understood when accepting the utility of a stateless human society is that: answers to every supposed problem are possible to find and then develop. All the people working toward finding resolutions to the needs of society will develop a plethora of solutions and the best of those will rapidly be widely employed. Further, attempting to predict what these solutions will be is as ridiculous, and likely as inaccurate, as it would have been attempting to describe how society and the economy would appear and function after the abolition of slavery. Slavery was not ceased because a 'slavery-free' future was planed and understood in detail but because the immorality of slavery demanded it was made to end. So it must be demanded that 'the violent state' is made to end too.
I do have many ideas of cause as to how free-market policing and justice would take place in a system offering a level of service and accessibility clearly unobtainable when these functions of human society are usurped and monopolised by 'the state'. I too have ideas for what would replace 'the state' operated penal system. The focus of that would greatly depend on what the free-market demanded and what the free-market judicial system could legitimately find legally sound and therefore moral.
I suppose when people cannot be made, by the threat of violent force, to pay to incarcerate offenders there will be a very different criteria emerge as to what is realistically desirable, such as cost-effective achievable goals for reform, deeper psychoanalytical understanding, life-retraining and so on. People who had to be removed from society because of the danger they presented would need to also be accommodated within a system, but clearly; being faced with an entire population entitled to carry whatsoever means of protection they felt prudent the population of hardened criminals would soon reduce to manageable numbers too.
Bitcoin has been victim of its optimistic supporters in so much as people have speculatively invested in Bitcoins whereas that is not its real purpose. It is first and foremost supposed to be a means of exchange - that is its strength. But as a means of exchange it has not started to be truly useful. I cannot see making my larger payments say from UKP to JPY is really helped by using Bitcoin as the mechanism of transfer. It needs me to hold funds as Bitcoin and sellers to want to do the same and that is a long way off. It is an unknown and subject to sharp value fluctuations.
Now if the IMF came up with a son-of-Bitcoin that was indelibly tethered to their SDR basket of currencies the day of the digital coin would happen immediately. And if every major bank offered access to the same service too: people would start doing business. This I predict is what is going to happen.
Now all that is fine and dandy but the Bitcoin has one more feature that I presume could not be the case with an IMF-SDR digital-coin which is: Bitcoin is not a fiat currency - there is a finite volume of possible Bitcoin algorithms - so Bitcoin will tend to grow in value if and when its uptake becomes more prevalent - be pro-rata deflationary with growing usage.
The people who understand this make the bulk of the speculative investors today and they have at least 'keep the wheels on the wagon' to this point in time. Bitcoin's potential growth in value yet to come is roughly (optimistically) equated to the value of all the fiat money in the world today.
Will it happen. I think not. There may be a limited volume of Bitcoin's possible to produce but there is no limit to the introduction of other technically comparable digital-coins that could share the supposed same deflationary quality (limited volume). So the idea of a limited volume is not really correct.
I predict there is a place for Bitcoin as an early market leader, an established brand, but it will be joined by a plethora of digital-coins backed by known brands and entities, including maybe even digital versions of existing national currencies, a PayPalPunt, an AmazonAmericano, an AppleSeed and the soon to be popular RothschildRenminbi. The water could become very muddy.
The only survivor could be the 'block-chain' which manages the Bitcoin records amongst other tasks too. But since the block chain is the keys to recording every financial transaction conducted I am very doubtful of its continued independence. I think the UN will claim that crown as the corner-stone to its new global tax regime. Then we can start to understand what may lay behind this anonymous experiment as has been similarly suspected of apparent 'new start' IT providers throughout the history of the digital revolution.
See also: Forming the SDR Global Monitary & Political Union