The recent apocalypse-like incidents in Egypt will cast a shadow on the Egyptian people for years to come. The psychological impact of this state of anarchy and lawlessness will change Egyptian identity for ever. The Egypt that existed before 25 January has changed irrevocably.

For the thousands standing in Tahrir Square, the last ten days were a mixture of peaceful expression, optimism, frustration and fear, of both turning back and what will happen to the country if they give up. Desperate to hold on to nine more months of power, President Hosni Mubarak's regime showed the world his dark, ruthless capabilities – a brutality long familiar to the Egyptian population – which left behind 300 dead and 5,000 injured in less than two weeks, according to Egyptian ministry of health figures.

The important question now is what Egypt would be like if Mubarak succeeds in tightening his grip on power again, after the most serious challenge to his rule since he took power in 1981.

During his 30 years in power, Mubarak has been known as a benign dictator who has given his people a margin of freedom and expected them in return to be grateful, and careful about misusing it to speak out against him.

In contrast to his fellow dictators in nearby Libya, Syria and Sudan, the president was respected by world leaders for keeping peace with Egypt's historical enemy, Israel, and sometimes going the extra mile to defend Israel's interests with even more passion than Israel would show in protecting her own interests. This made him a good friend of the United States. US support of Egypt has, however, been criticised. The US was constantly accused of backing up dictatorships as long as they applied a World Bank economic agenda and were kind to Israel.

This made Mubarak a soft dictator compared to his Arab nationalist, socialist and anti-western friends in Libya and Syria. His partnership with the US, as well as Egypt's increasingly integrated economy, based on a World Bank agenda, forced the regime to carry out some (mostly cosmetic) reforms. Within the narrow margin of liberty allowed by the regime, however, political dissidence grew and voices calling for change and democracy became louder each year. As Mubarak's promises of reform proved empty, pressure on the US by the Congress and pro-democracy activists increased to stop funding one of the world's 20 worst dictators.

Political pressure on Washington peaked in the aftermath of the events of 25 January, when President Barack Obama started actively calling for Mubarak to step down. Mubarak's need for Washington's support is a major reason why his regime was relatively gentle to his internal opponents or criticism. Now that Cairo and Washington are not the best friends they used to be, there is little incentive to halt the violence and censorship that security forces imposed during the past week. The first sign of this was the regime's crackdown on foreign journalists, for long believed to be untouchable by the Mubarak regime. The attack on them took place immediately after Obama's request for Mubarak to step down.

Now Egypt is at an important crossroads. If the revolution succeeds in overthrowing Mubarak, the people of Egypt will be able to orchestrate a peaceful and smooth transformation to a truly democratic political system, including a new civil constitution and locally and internationally monitored free and fair elections. The country will experience the end of emergency rule, and the arrival of a civil, non-theocratic and non-military political system. Of course there will be some hurdles along the way, but Egyptians paid too huge a price in their struggle for democracy, enduring previously unmatched horror for almost two weeks, to give up on it easily. Their new and hard-won democracy will be protected vigilantly by the people to ensure it does not slip into a military or a religious dictatorship.

But if Egyptians fail to remove the Mubarak regime, which seems an increasingly unlikely scenario, it is possible that a North Korean-type dictatorship – or worse – will take hold if the president manages to tighten his grip on power again. This fear is why many protesters do not not trust his promise to step down in September, especially coming from a man who is known to have left a long trail of empty promises behind him.

Always one to learn from his mistakes, Mubarak, it is likely, will disperse even the smallest protests in the future, rooting out any dissent. The operation of foreign media is likely to become tightly controlled by the state. New social media – one of the catalysts for the revolution – will be subject to larger scrutiny, and probably more activists will end up in prison. In short, the ruthlessness of the regime will increase as it stops chasing American approval and financial aid.

This is why many of the brave protesters continue to gather by the millions around Tahrir Square at the heart of the Egyptian capital: the impending so-called chaos that Mubarak warns of if he leaves office is far less harrowing than the restrictions and brutality that await Egyptians if he does not. Unluckily for Mubarak, many of the demonstrators see it as a choice between freedom and the leader rather than chaos and the leader.

The recent developments will affect the country's collective identity for decades to come. A new Egypt is born, but its features are still undefined. The next few days will decide what Egypt and the region will be like decades from now. Until then, all fingers remain crossed and all eyes remain on Tahrir Square.

Osama Diab is an Egyptian-British journalist and blogger.