Why Taxing Bitcoin Defies Logic in Bill Miller IV’s Bold Perspective

The Blockchain State Team

07/14/2025

While governments around the world scramble to regulate cryptocurrencies, the fundamental logic behind taxing Bitcoin remains deeply flawed. Bitcoin ownership exists solely on the blockchain, not in government filing cabinets or land registries. No bureaucrat stamps papers when Bitcoin changes hands. It just happens—automatically, publicly, and without government assistance. Yet somehow, the tax man still wants his cut. Funny how that works.

Unlike your house or car, Bitcoin wasn’t created by any government. No state infrastructure maintains it. No public works make it possible. The blockchain protocol handles all that independently.

So when governments claim they deserve a slice of your Bitcoin pie, you might wonder what exactly they’re being compensated for. Their outstanding non-involvement?

The current tax system creates a regulatory nightmare for Bitcoin holders. Buy a $4 coffee with Bitcoin? Congratulations, you now need to calculate your cost basis and report capital gains. Every. Single. Time.

It’s a prohibitive quagmire that makes using Bitcoin practically impossible for everyday transactions. Meanwhile, traditional currencies flow freely without such burdens.

Many experts suggest a more sensible approach—only tax Bitcoin when it intersects with the real-world economy. When you cash out to dollars or buy actual goods, sure, that makes some sense. But taxing crypto-to-crypto transactions? That’s like taxing someone for trading baseball cards in their own living room.

Traditional tax logic falls apart when applied to Bitcoin. We tax property partly to fund the very systems that make property ownership possible—courts, registries, enforcement agencies. Bitcoin needs none of these things. Direct peer trading through platforms like Coinbase has made traditional financial intermediaries obsolete.

History shows that despite regulatory pressures, Bitcoin’s price has always recovered from bear markets, demonstrating remarkable resilience against government intervention.

It’s self-sustaining by design. The blockchain keeps its own records, enforces its own rules, and transfers ownership without government help.

In a world of logical taxation, Bitcoin would be treated differently. But logic and tax codes rarely share the same blockchain. As Bill Miller IV pointed out, Bitcoin’s peer-to-peer architecture enables transactions without government oversight, fundamentally challenging traditional taxation frameworks.

"The old world runs on trust. The new one runs on code."