The technology is perfectly sound and in its original blueprint it was never meant to be "traded" or denominated in an actual mainstream or fiat or government currency. So if centralized elements (i.e. major exchanges) are the cancer, then regulations such as these are the scalpel.

If adopted, a cryptocurrency can perfectly serve an ecosystem as an exchange of value, without ever crossing the barrier to the mainstream monetary systems. I.e. a loaf of bread for a certain fraction of a Bitcoin.

That sounds lovely in theory, but once you get to an exchange of value, you cross the line into taxable territory, and will have to exchange something for fiat currencies.

Sure, most minor barter transactions are ignored as de minimus, but that does not make it legal (i.e., not tax evasion).

So paying your neighbor for a loaf of her home baked bread with a wad of coupons for the local store (or Satoshis) is probably ignored because she is not an official business, but if you do the same at the store, or she grows to anything beyond casual home cooking, the store and your neighbor will need to pay both sales tax and income tax - in fiat - on those transactions.

Same goes for us trading anything large, say we barter my car for your boat (or a bunch of BTC, gold, gift cards or whatever), we'll have to pay taxes on the transaction, in fiat. And we may have the additional pleasure of needing to get an appraisal too.

So the idea that crypto currency could never touch fiat was never anything more than a lovely figment of the internet imagination.

The imagination then continues -- the users of this cryptocurrency-based break-away economy then establish a voluntary tax system, where each user sends crypto to the address/wallet belonging to the respective part of the government they want to see stronger/they agree with their direction -- e.g. firemen, army, roads. The address of an entity e.g. army could further be separated by policies e.g. defence vs foreign missions. It would also be customary to publicly advertise one's own tax contributions source address (which then can be easily expanded to all addresses this address has contributed to). In other words, for the first time in history, we'd have an actual democracy.

Yeah, right, the same trope that 'we don't need taxes on the rich (e.g., progressive rates, wealth taxes, etc.), because they can just donate any time they like.

Meanwhile, in the real world, without such wealth taxes, the problem is not' how do we accept all these donations and what do we do with the surpluses?'. The problem is that the wealthy spend enormous sums both capturing regulators to minimize tax, setting up legal structures to avoid tax (trusts, corps, etc.), and setting up outright illegal global tax evasion schemes.

What you propose does not even work on the scale of a condo building. That Miami building that collapsed couldn't even get agreement for years in time to expedite critical repairs, and it killed like half the residents.

Even myself, I'm proud to pay my taxes, understand that in every large complex endeavor or system there will be significant things that can be called out as 'waste', yet I also take advantage of every tax break my accountant recommends.

Enjoy your fantasies, and let us know when you are interested in joining the real world.

That sounds great in theory, but how would you properly fund foreign interventions, the war on drugs, dragnet surveillance, bailouts, anti-competitive corporate regulations, and other unpopular policies if nobody is willing to pay for it?

That's why bundling taxes in a few non-optional packages is so important. Otherwise people will try to selfishly evade paying for services they believe they don't need, and needlessly pry into public finances despite having no expertise in it.