It could be that I'm wrong in my reasoning, but it appears to me that bitcoin allows tax evasion and black markets to function on such a breathtaking scale that if bitcoin persists and expands into common use then I anticipate, like tomatoes in winter, the withering of formal governmental power in its current form (based as it is on tax collection

Do you know how they catch tax evaders in Italy? They go to the harbour and look at the yachts. edit: and pretending to be poor to cheat taxes completely defeats the point of being rich. Granted, some people will do that, but they effectively eliminate themselves from the economy, as if those coins disappeared, raising the value of all other coins. They pay nearly 100% tax rate. It would be worthwhile to encourage that kind of behaviour, it's good for the environment, and it taxes more than any government taxes.