How will taxes work in a blockchain world?

TL:DR; In a blockchain world, taxes may default to be entirely connected to physical assets, in particular property.

I get the question about taxation a lot from people when I talk about crypto and blockchain. The simple fact of the matter is that I have no idea how it will all work out.

I do know, from personal experience, that tracking taxes with crypto now is a total nightmare.

The speed, liquidity, and ultimately privacy that crypto is going to afford all of us will create new problems for tax authorities.

I think taxes are a necessary evil, so I’m not saying abolish the whole thing.

What I am saying- and this is similar to how I feel about regulation- is that it’s important to keep the end goals in mind but to ask ourselves, “given the arrival of this technology, how do we achieve these worthwhile societal goals?”

That is instead of doing the “fit the square peg into the round hole” approach which is to just apply the systems we already have.

I guess I had a bit of an “ah-ha” moment when I saw Phillip Kingston’s tweet recently on a thread I was tracking.

I found it simple and elegant, even if it is difficult to believe now that it will transpire.

Taxation in a blockchain world is going to be different than today. If you do the thought exercise that Phillip stimulates, you can start to explore what this means for society, both for the good and for the bad.

The key, particularly at this early stage of crypto, is to not discount the possibilities for the future.

Death and taxes may be life’s only certainties, but how they happen can definitely change over time.