Not sure how it being food and other essentials makes it any less relevant. It was still black market. It was not just those things either. It was music, clothes, tools, parts, and much more. Basically anything that had demand.

Maybe, but in that case Bitcoin would be even more useless because it is much easier to spy on

They can't even keep drugs, phones, etc from entering prisons - the most locked down, surveilled, and controlled populations on the planet. I think we'll be ok...