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In practice crypto isn’t used much as a medium of exchange, though, and when you try to cash in your coins you will get nailed for any evasion or criminal behavior. It’s possible that buying things directly with crypto will become more widespread, but expect this to trigger more laws and reporting requirements so that your transactions can be taxed.

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It's still very young. If crypto gets relevant adoption, it'll be impossible to discern legitimate transactions from illegitimate ones. If it's technologically impossible, you can have all the laws you want - you're not able to enforce them. People will have their official wallets for tax collection and their anonymous ones for everything else (and will do their main transactions with them).

> buying things directly with crypto will become more widespread

I'm expecting this to be the case if adoption happens.

This seems very optimistic to me. I’m reminded of the xkcd where the cryptography enthusiasts imagine that 4096-bit security will protect their secrets, but in reality no one bothers with that. If the government requires ID for crypto purchases, they can shut down businesses that don’t comply. Businesses will comply. The tax agency can audit you and see if you have nice stuff that’s not accounted for. If you have a significant source of income from unreported crypto, this will likely be evident in many ways — business relationships, web presence, letters in the mail. Very few people can actually turn into ghosts, even with crypto.

I know crypto millionaires that had to show their e-mails to the tax officers to show which addresses were used for getting paid. I really hope you're right.

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