Your wallet is linked to the public ledger, but that doesn't mean your identity needs to be. And I agree--privacy is not an issue for BTC, and the public nature of the ledger increases trust in it.
And yes, they can tax BTC as capital if it is sold for USD, but solely owning BTC and it appreciating value cannot be taxed--because in the 90's the supreme Court determined that code is just speech (they wanted to levy taxes on it back then too) BTC is therefore not taxable on gains unless sold. There hasn't been a court reckoning for this since the BTC technology came about, so it will be another ordeal--but it is the standard of SCOTUS to side with preexisting precedents... Especially ones that aren't even 30 years old. Check this article:
http://reason.com/blog/2017/10/05/bitcoin-is-free-speechwhy-jamie-dimon-wa
Even if regulatory agencies regulate the action of third party exchanges the way bitfinance tried to, they only drive users and investors out of their market (which in the digital market takes nothing more than a little encryption... No travel needed). They can try regulate it, but the beauty is that they will fail. That's the whole point of crypto.
That article you sent me may lay down some current operating precedents, but it is nonetheless wrong. Getting paid in crypto is not like getting paid in gold--it's like getting paid in brownie points that are actually spendable.
I see what you're saying, the article was an interesting read... nevertheless it's my opinion that in the future, they will find a way to tax crypto. If crypto denounced fiat currency, they would have to. Some taxes are required to fund things like schools, road improvements etc. and therefore the taxing of our financial method of payment is an inevitability.
Imagine the world in which you can pay your electricity bills and your internet bills with crypto. Great right? But you're dealing with companies that could be forced to disclose information about their users via government authority. And due to the nature of these kind of arrangements, your ISP and electricity provider will have all the information the government would need to track you down.
The only way to get around things like that would be to use private coins like Monero. But in the future, major organisations such as your electricity provider would possibly not accept such coins, due to their inherent dodgy use cases.
Crypto may have protections now due to being seen as "speech", but I just can't see it staying that way if it becomes a mainstream use of payment.
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Well, it will remain speech, because the supreme Court has already set the precedent! Just because it hasn't been reckoned, doesn't mean it won't hold. Also, you said "Some taxes are required to fund things like schools, road improvements etc. and therefore the taxing of our financial method of payment is an inevitability."
This is just plain wrong. Taxation is theft, plain and simple. Every service that taxation is though to be needed to pay for would be far more efficient and cheap if provided in a voluntary context, as needed in each place, not prescribed from a central authority.
My thought is that if the greed of the government were not slightly overstepping the self-preservation/power-loving aspect of the government, then crypto would be screwed for a little longer... But as it is, their greed is allowing for crypto markets to function because they want to nationalize the profit from them. This is gradually pulling out the supports from USD and will lead to it's replacement much more quickly.
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