Interestingly, your idea has already been implemented. It is called Ethereum. Because of comparatively less no. of nodes participating in the Ethereum network, it is not yet as strong as Blockchain.

You seem to assume that all of humanity will be forced to use the blockchain. I'm not so sure about that.
Moreover, you can't subject me to any form of digital oppression if I'm offline.

I'm arguing that the social benefits you would gain would be too good to refuse, and the system would be to massive to alter, ending up again in the situation we are in right now... did you choose what operating system to use, or was it simply the only viable option?

Offline, would be an option, but considering how much of our digital selves has invaded our reality, could we really do it? Could we survive without relying on a greater omnipotent system, which we have little control over? Think of the symbols on our cash.

Let's not forget that there can be more than just 1 blockchain. Talking about Blockchain opression is really thinking about it wrong way. Everything about bitcoin is uncentralized so much that even blochcains have their alternatives.

Are we going to see the closest conditions to genuine free market economies that humans have ever had?

  when I think deeply about this issue, I see that we have done just that to the banking system. We have proven that we can automate all their tasks, though now we actually do have a say on how things are done; in a way we have driven to the margins those who would enjoy having a system that allows charge backs, or more conventional schemes of accounting. This philosophy that Bitcoin has espoused is evident down to it's code that simply does not allow it to happen... can't even have integrated debt built in; It is non-existent under this scheme... will we address these issues when the network is so large and prominent that we can only forgo Bitcoin's security for different accounting methods. yes, we can merge mine it and have it's security and apply new rules, but we would still be subject at some point to it's rules.

  we can do this to a lot more than just finance... What is government? A collective representation of the will of a people, whether it is represented by a tribal council, a monarch, or a appointed official. What is the will of the people? Is it reflected in the power that we delegate to individuals? Those we choose to represent our point of view... with the current state of technology we don't need to be represented, we can all have timely access to information about relevant issues whenever we want. But, the rules, the laws, the written edicts passed down from one era to the next, to define their rights and responsibilities, these can be written in immutable code on a blockchain that anyone can access, but who has the right to modify these edicts when there are no official delegates to abide by them, these rules too will be written down in immutable digital code, with API's accessing them, voluntarily abiding by them to the point where nothing can be done without them. It will be a sad day when you choose to opt out of a system that is complex, omnipresent, and all knowing, just wait till entire city wide systems are managed by autonomous distributed systems, which only a mass majority of a districts citizens can modify. You'll have no choice but to move to a community closer to your own ideals or do mass petitions and education rallies to change them.

  The problem of authority and decision making. yes, with open distributed databases running the planet you will never have to get a drivers licence; the system will know you are authorized, prove your identity; anyone can verify who you are... forever, or submit information to any legal authority; disputable matters will all be recorded on your private database.  Decisions: who certifies that you were born? who certifies where you live? that legal disputes have been resolved? Do we simply apply a random check by qualified individuals to assess in an unbiased manner a societies problems? and if we apply automated rules to this process who decides these rules?

  The first problem is figuring out what we agree on, and the faith we have in what we know. 

  Will we one day be born into digital apartheid? Without choice as to the laws and systems that will mold us, unable to choose for ourselves the standard by which we wish to be measured, till age of majority? Cursed to follow the path our parents have set forth before us.

  It will be a time, when politics will not be a negligible aspect of our lives, it will be life or death. The wrong rule, can unwittingly pit city against city, rural vs urban, poor vs rich... what we don't know will hurt us.