So if everyone uses Bitcoin, then how will all the services that are paid for with taxes be completed?
And don't get me wrong - I think the government could easily be 1/10th the size it is now, but I do believe that SOME form of government is essential for maintaining services like fire dept, police dept, roadways, utilities, national defense, etc.
Natural resource taxes, particularly land. You can hide your bitcoins but you can't hide a plot of land. Land taxes also feature negligible deadweight losses and limited maximum revenue, so the government will do less damage and "starve the beast" would actually start working.
Even farther in the future, there are private alternatives for those public goods:
* roads would be paid by tolls
* fire/police would be paid by insurance
* utilities are already privatized in some places
* national defense could be paid by crowdfunding
Those are just off the top of my head - I'd be willing to bet that the market will think of better solutions than us armchair economists can.