I can't use crypto for anything useful without it. This advice means crypto is useless.

not entirely correct; if you both earn and spend all of your crypto directly as cryptocurrency, then you can fairly easily just remain entirely anonymous. This just doesn't apply to most people, at least most who do legal business.

For me and the vast majority of people that is a complete non-starter. And the primary value of a currenyc is that it gives you liquidity to participate in the economy. Until crypto can claim the same thing it only barely qualifies as a currency in my mind.

What about when it comes to paying taxes on those earnings?

Gains can be reported to the IRS without revealing their source.

Sounds like a recipe for an audit, at least once they can clear their backlog. At which point, I'm pretty certain they're going to want to know more than "generic cap gains sale"/"revenue paid to me in cryptocurrency". They pretty clearly do not want anonymity in the flow of money.

If you spend it to KYC wallets (a company providing Internet hosting, for example), you won't be hard to deanonymize as well.

Is localbitcoin not still a thing?