I know that the legislation is very varied around the world, but as far as I know in most countries, it is regulated as a financial asset and not as a currency, therefore, every time you spend you create a taxable event.

Someone who buys $1k today and goes out a couple of hours later to buy a coffee for $3 when the price of bitcoin has gone up 3% owes taxes on the profit of the proportional part of that $3. If tomorrow he buys something else but the price has gone down below when he bought bitcoin, he can deduct losses on that proportional part.

I believe that in countries where bitcoin is regulated as a financial asset, it will be difficult to use it for day-to-day payments, even with LN. I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

Another thing is countries like El Salvador, which recognize it as a currency, and I imagine that citizens do not have to account to the IRS for every transaction they make.

What do you think about it?