> it just means that government spending will be kept on check and limited by the amount of money they can tax from people

Governments can borrow money with or without fiat currency, so I don't know where you got the idea that a crypto-currency would stop governments from borrowing.

The difference is that without fiat currency, the government can't inflate it's currency to pay off the debts. At the very least it means that the population does not have the risk of their savings becoming worthless anymore, and it probably also disincentives the lender to give money for such purposes.

So you admit that your whole point about governments not being able to borrow was nonsense? Good.

Yes. The governments would still be able to borrow, but they won't be able to do it in an unchecked manner.

Since the lender would know that they are not guaranteed to get their money back at the expense of the borrower country's population.

If anything, the inability to print money would make governments more dependent on borrowing, since the ability to print your own money eliminates the need for borrowing.

Governments would try to borrow more, but would there be enough willing lenders?

The endgame is forcing governments to be more fiscally conservative and generally less bloated.

Different people have different preferences with regards to the level of government spending. In general, the actual level of spending will be some sort of average of society's preferences. You, as an individual, will have a hard time imposing your individual preferences about government spending on the rest of society, and "crypto" is not gonna help you achieve that goal in any way shape or form. That doesn't mean to say government spending is unconstrained. Of course, it's constrained, by the government's ability to tax and to borrow, but generally not by its ability to print money. If governments were to lose their ability to tax, we would end up with a bunch failed states, which is a considerably worse situation than having "bloated" governments. And their ability to borrow depends on their creditworthiness. To me nothing suggests that crypto-currencies can have any impact in any of this, to be honest.

Politicians not being able to fund infrastructure, education or healthcare on the other hand, is a disastrous thing.