And for the purpose of sending censorship resistant transactions, it works pretty well. Bitcoin transactions are basically never censored, where as other types of transactions (such as bank, credit card, and PayPal, ect) often are censored.

Seems like it has worked out quite well.

This new law will also make sure that "censored" persons can not convert bitcoin to fiat. For them bitcoin will be worthless because they have to pay their taxes in fiat.

If this is a blueprint for what is coming in the rest of the world, bitcoin is over. It is now worth less than Gold, because Gold can not be traced.

Nope! There are many people that are censored which have broken no laws, have not been charged with any crimes, and yet the banking system tries to block their payments anyway.

By making the transaction on the blockchain, PayPal, who whoever, can't just decide, on a whim to block your transactions arbitrarily, even though no law has been broken.

An example that comes to mind is WikiLeaks. There was a time when donations to WikiLeaks were blocked, through the credit card system, even though they were not charged with any crimes.

Yet the Bitcoin transactions succeeded, and nobody was sent to jail for donating to WikiLeaks.

Financial censorship is something that is often done even though people have broken no laws, and the act of the financial censorship itself is actually the illegal action.

This has nothing to do with people breaking laws. The most common financial censorship is done, arbitrarily, to people who have not broken any laws, have not been charged with any crime, and who will never been able to defend themselves in a court.

Stopping this kind of financial censorship, is extremely valuable.

This is also true of exchanging five eggs for some butter, so anyone who thought a new currency would somehow exempt them from tax laws (and the currency in which the tax is denominated) was always foolish.

Maybe in a decade or three, it will be possible to pay taxes in a cryptocurrenty too.

For now, we should be careful and observe as the technology evolves and the impact of cryptocurrencies on markets and society increases.

I had the impression Satoshi was relatively matter of fact about Bitcoin, but I haven't read much of his/her/their own words.