The buddy would owe taxes on receiving the money like receiving any kind of money (is it a gift etc?). Beyond that they owe capital gains or can take a cap gains loss due to changes in btc price if they hold onto the btc. If they receive it and immediately cash it out the additional potential capital gains taxes would be extremely minimal. I don't really see what the issue is here?

People send and receive money and owe taxes on it, whether it is using bitcoin or dollars or whatever... The difference here are the reasons the parent post said they enjoyed sending the money via btc.

They only owe tax on what they earn through price speculation (e.g. if I send my buddy $1k in Eth, and he sells Eth for $1.2k, he pays tax on $200 only. If he sells for $0.8k, it's a loss, and he can do the tax writeoff on the $200)

LOL just like everybody pays all their taxes on gifts right? Do you know how Monero works? Monero is completely private and there's too many exchanges for the government to audit them all, and besides that the laws are bound to change in the near future as crypto-currency becomes more viable. Stop being so cynical, it's a poor long-term life strategy.

So besides money laundering, the other use case for the blockchain is tax fraud?

what I'm saying is that anybody who gives somebody five dollars is technically supposed to pay taxes on that, but when's the last time you did that? "Tax fraud" is rampant if you're going strictly by the book, it's not just limited to crypto-currencies. (But the fact that you attempted to make that point isn't surprising considering Hacker News in general seems to be very cynical towards crypto-currency)