[selectodude]

>Cigarettes in prison is an example of a currency that is not taxed per se.

Yes, cigarettes, like the dollar have an intrinsic value. You can smoke them and nicotine makes you feel good. It is similar to the way that I can pay my taxes in USD and feel comfort in the fact that I won't have to barter for cigarettes in federal prison.

Bitcoin is not a currency because it no longer meets the primary economic definition of currency - a medium of exchange. It is a speculative asset. A security, if you will. It can be used as a currency in the same way as gold bars and bricks of cocaine can (barter system) but it's not a currency.