However, masses don't have a compelling need to use Bitcoin and the tax issue adds another reason for them to stay away. The rumor will spread virally, "you need to do a Schedule D to use Bitcoin".
People will slowly realize that the tax issue is NOT a good reason to stay away. All across America, there will be thousands of conversations in the coming years just like this one:
Jim: Does the IRS reaaaaaallllly give a shit whether I do a Schedule D? Surely I can just fudge it, right?
Bob: You could probably fudge it if you only used it like once or twice for small purchases,
Why did the USA expend in inordinate resources to make high profile cases of teenagers innocently downloading a few songs using Napster?
Please don't ignore the question.
The reason is because the government didn't want the population to be free of copyright law slavery.
Do you really think the government is going to give up its control over money?
Your mindset is based around things that don't challenge the government's control. Indeed the government will look the other way when their control isn't threatened. Even the guy who runs the FinCEN said in recent interview, they will regulate much more strongly if Bitcoin is used by most of the population.
or if you held it during a period when bitcoin value didn't go up a lot. The IRS really won't give a shit unless you made a significant amount of money on your bitcoin holdings.
Jim: And you're telling me that's a bad thing?
Bob: It sucks. My cousin Billy-Bob earned $50,000 in bitcoin capital gains last year and only got to keep something like $40,000.
You are conflating the market segment of speculators with the market segment of masses. You continue make this critical error.
You assume that the masses love to speculate. And you assume that Bitcoin is always going up. Hey right now what the masses see is Bitcoin is going down.
Masses are afraid of
volatile speculations. They come it at the end, to lose everything.
I do agree the Bitcoin could end up being a huge pyramid ponzi bubble as more and more get sucked into the intoxicating rise, with no fundamental compelling use as a currency. Smart traders will sell when it can be overhead at birthday parties amongst the mothers that they are buying Bitcoin "to the moon". We've seen this before in history of man.
Jim: What's so bad about that?
Bob: He like, had to fill out a Schedule D, man.
Jim: So you're saying it's worth it to give up $40,000 so you can avoid filling out a Schedule D?
Bob: Exactly.
Jim: You're mom and dad were first cousins, weren't they? .....
Now you are just being a dick. Is that really necessary to insult in order to discuss?