There's a question here that affects your story somewhat because governments do require you to calculate value in their currency (USD in your example). Let's s

There's a question here that affects your story somewhat because governments do require you to calculate value in their currency (USD in your example). Let's say you earn 100 BTC at the start of the tax year, and your tax rate is 30%, but BTC drops from 1000$ to 100$ over the course of the year. How much in taxes do you owe at the end of the year? 30000$ or 3000$? I don't actually know the answer for certain, but my guess is you owe 30000$ -- and if you didn't sell your BTC early, you're screwed. You could perhaps offset some of your taxes by claiming an investment loss, but that usually only works to offset capital gains taxes, not income taxes. On the other hand, what if BTC rises from 1000$ to 10000$? I expect you'd still owe 30000$ in income taxes, plus capital gains taxes if/when you sell your BTC.