If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government? Also, how can the government track our transactions?
There are lot of countries that Bitcoin is declared legal and Bitcoin taxes will depend upon the regulation that imposed by every government as there are countries that declared Bitcoin is free of tax like France and Japan. Here are the link for your reference of Bitcoin status on every country.
https://en.m.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territoryDecentralized currency like bitcoin is separated with centralized fiat money economic financial regulation, and as people continued to patronized digital currency I think their freedom in using virtual money has lot of advantage compared to traditional type fiat money. The link provision here could help those readers who has no interest with searching google or any other informative sites like Wikipedia. Government cannot stop bitcoin or hinder people from using or spending it, because of those reasons and I think regulation could only be applicable in order to be safe for the country.