Bitcoin is more regulated and more spied on than most forms of payment. To turn a large amount of Bitcoin into dollars in a bank account, you have to go through extreme AML/KYC checks. I can go to a gas station in California and send $1000 in cash to someone in Turkey who could receive cash and walk out a few minutes later. A briefcase full of cash is not regulated at all and can be used to settle debt or pay taxes, unlike Bitcoin. The only advantage of Bitcoin is not requiring the risk of physical presence, which has to be <1% of all crime. Also, unlike cash, Bitcoin by design retains a full immutable public ledger. The criminals can mix their coins, but it'd still be possible (although computationally expensive) to recreate a chain of transactions going back to the original ransom. In the future if Bitcoin is to become used in commerce more, it should be expected that these dirty transaction outputs would be worth less than clean ones or not accepted, like dollar bills cut in half taped together.
If a chemical plant sets up in an area then pollutes the environment during the course of business, it is required to clean up the mess. Known risks are required to have mitigations ready, and sometimes-expensive procedures must be followed to ensure safety.
Bitcoin (and everything like it) is very much at the "Pollute the environment with whatever the hell I want" phase of its existence. That should change.
Bitcoin should be taxed to recover the externalized costs it imposes -- basically, compensate the victims of bitcoin-enabled crime.
Is only a small fraction of bitcoin usage related to crime? No problem -- the tax will be very low.
We don't have a tax to compensate the victims of crimes enabled by cash, gift cards, Western Union, wire transfers, etc. Sorry, but I'm still not seeing the point being made here.
