Writer and professor of global affairs Marc Chandler has a piece up on his blog that examines a bit further what we’ve already reported on as an oligarchy of Bitcoin owners.

Chandler writes on MarctoMarket.com that “such concentrated ownership speaks to limitations on the ability of Bitcoins to reach a critical mass in terms of the network effect required to be money.”

In short, having most of us scramble for the 20% of Bitcoin wealth not concentrated in the hands of a thousand people or so is a problem.

A big one, in fact, as Chandler’s argument goes. This, which he calls a “critical imbalance … has replicated the disparity of the social order from which it arose.”

Meet the new currency. Same as the old one.

Furthermore, Chandler argues that some of the key features of digital currencies — ease of transactions in particular — are simply a “wake up call to the credit card companies, consumer units of banks, and the like.”

Rather than becoming a disruptive technology, digital currencies are more likely to be developments awaiting co-option.

The essence of his argument seems to come down to power.

There are two questions here: Does the value a government assigns to its fiat currency hold more sway than a network-derived value (Chandler seems to be arguing yes), and does a government (or do the incumbent financial institutions) have sufficient power to render Bitcoin totally or mostly value-less?

To put that second question another way: Could more governments repeat China’s actions from last week and scare away enough users to undercut a digital currency’s value?