Bitcoin doesn't do anything to prevent taxation of real estate or otherwise conspicuous property (which, incidentally, I find to be superior forms of taxation anyway). The government says, "this land is worth X GBP, pay y% of that or be evicted". It doesn't need to follow trillions of transactions to get that to work. It only has to follow transactions related to transfers of such conspicuous items, which (unlike with other valuables) it has significant control over due to people's need for government to recognize that ownership.
For example, if a gold coin is stolen from you, "good luck getting it back", but if a horde somehow decided to "steal" your house, the government doesn't have any problem eviicting them and giving it back to you. Since people want the government's title registries to recognize their ownership of a house, I suspect they would play along and disclose purchase price in home sales. (And this is all assuming the government will bother to get property valuations correct in the first place...)
taxation of real estate or otherwise conspicuous property (which, incidentally, I find to be superior forms of taxation anyway)
What are the examples you're thinking of of countries who get the major, or even a substantial, proportion of general revenue from land taxes rather than income and/or sales tax?
Tangential, but a subject of some local interest:
Why Bitcoin will fail by Avery Pennarun. "The sky isn't red." Thesis:
I'm not sure I buy these and am not competent to evaluate his claims on 3., but would like others' critique.
L019: Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen by Jason Calacanis. A rather more enthusiastic viewpoint of the project:
The actual text contains many more caveats than the eye-catching selection of points above.