> And if you were paid in bitcoin, you have the same capital gains to report when you effectively translate it to fiat while buying your new Gameboy.

But what if you never have to translate it to a "real currency"?

Granted - bitcoin isn't anon - but let's suppose it was (or there existed a e-currency that was). If every transaction in the entire supply chain was carried out using such a currency, how would any government ever know (without inserting a MITM into the supply chain)?

An alternative thought: If you conducted all aspects of your life cash-only, how would the g-man "get you"? I suppose Al Capone could be brought up as an explanation (whatever was the reasoning there) - but there were other factors involved (they wanted him for other reasons, but tax-evasion was the easiest way - at least, according to what we've been told).

But as long as you conducted your affairs completely off-the-books, and only worked with vetted (or anonymous) others who were doing the same (so you never transacted cash with a government official or someone working for them) - how would they know?

Another thought experiment: If you conducted everything using barter (let's suppose that were possible) - would you then owe the government so many chickens or pigs as "tax"?