Oddbean new post about | logout
 how does Monero help to prevent governments from taxing bitcoin? 
 It doesn't, but if people who use bitcoin used Monero instead, they could not be taxed because they could not be found. 
 I'm not following, if you use a centralised exchange *which is what we are discussing here) Monero would be taxed too. 
 Why would anybody be dumb enough to use a centralized exchange? We've had this technology for 15 years and the technology has not failed, but the exchanges around the technology have failed more than once and will continue doing so. 
 Because decentralised exchanges are sadly not ready for large amounts of money.

I'm not defending centralisation, I hope we move towards that way.

My point here is that bitcoin can also be used in decentralised exchanges, you don't need monero. 
 Of course, Bitcoin can be used on a decentralized exchange. However, most Bitcoin is obtained through centralized exchanges with no-year customer, and therefore reduces the anonymity of people who use decentralized exchanges, making Monero more of a need. 
 This was also about confiscation. Obviously it's more difficult to tax/confiscate something you don't know someone still owns or is harder to surveil. Even when buying Monero from one of the few centralized exchanges left that offer it - as soon as it leaves the exchange the trail is lost by default.

Bitcoin:
You say you lost your keys? "We see it clearly moved after you told us that"
Someone hacked your keys? You sent to the wrong address? "We see you later consolidated Bitcoin from your 'hacked' keys/burnt coins with your current Bitcoin"
Coinjoined to throw them off the trail? "You mixed your funds with these criminal proceeds, so now you're a suspect (even if you're truly not)" i.e. Roman Sterlingov

There are still ways to mess up on Monero too, and you can do things on Bitcoin to avoid the things above (requires relatively large time commitment to learn and constant maintenance going into the future, which you or your heirs can still accidentally mess up later) but there are far more ways to screw up on Bitcoin. All things equal, Bitcoin is much worse for plausible deniability.