Taxation will adapt. The Land Value Tax is a crypto-compatible tax. It's the taxation of the unimproved value of land. That is, it's a property tax, but only taxes the value of the land but not the property. This means you pay tax for the rights on land, but everything you build on top of it is not taxed. Your home, your business, your leisure, or your crypto.

This allows for a market based economically efficient progressive tax. The elite of the world dominate in terms of wealth inequality. In the US, the 1% own 40% of the wealth. Land value is highly correlated with wealth. A land tax would allow ensure they pay a fair share, but do not pay when they build productive things.

It's inherently market based since if the government's valuation of the land is too high, they could pay you in a lump sum of it's assessed value in exchange for your payments. This would make the government very cautious about value assessments.

For the most of us who labor for a living, a land tax would not distort labor markets. It would reduce administration expenditures for business and individuals alike. Most of us own very little land and your tax will only go up if you have enough wealth to pay it. If you have no wealth, you pay no tax.

A crypto holder who lives a modest life will pay very less tax. A crypto holder who consumes lots of resources will directly and indirectly pay the land tax through their consumption. The tax would not require declarations of crypto assets or detailed transaction histories.

It could vastly reduce the government's administrative burden in tracking all transactions for sales taxes, all income for income taxes, and all investments for capital gains taxes. The value of land can be market based since a too high tax will cause people to abandon their land and a too low tax will increase land values. If the government invests in good projects, the value of the land goes up. If the government invests poorly, the value of the land goes down and they will be forced to adapt.

A foreigner who consumes local land and resources will pay, no matter what their income is. There's no dodging, evading, or hiding land in offshore accounts. A shell corporation doesn't deter this tax, which reduces the number of corporations solely for tax purposes. This makes it easier to keep track and investigate corporations who fund terrorism and other crimes. With the government apparatus freed from investigating normal people for tax purposes, they could focus on the funders of international terrorism or cartels.