[imtringued]

Yeah, the problem is that you cannot spend your Bitcoin directly. If you could use your dollars to buy Bitcoin and then proceed to buy a pizza you wouldn't have to pay taxes.

In practice the only ones who are actively using their Bitcoin for consumer spending use a credit card where they deposit their cryptocurrency. Since the credit card company is automatically converting your cryptocurrency back to dollars you have to pay taxes on the gains.

[3np]

Actually, no, that’s exactly the problem. Directly spending your bitcoin to buy a pizza would trigger a taxable event for the buyer. Enforcement of this might be weak so far, but technically that’s the case.