Ah, but you see, it's totally anonymously recorded on a totally public ledger entirely segregated from banks but irrecoverably tied to large entities designed to hold and facilitate the transfer of cryptocurrencies (who frequently hack, scam, and 'lose' currency) (did anyone mention that you can only do, uh, eight bitcoin transactions per second? Across the planet?) to build investment! It's true to the spirit of decentralized currency!
Crypto's missed the original purpose of crypto and it's never going to get adopted in a fashion that'll bring it anywhere near the ideal of crypto. Nobody stops to think about how much stuff they can buy with a microbitcoin, only how many dollars it's worth. Its value is derived entirely on the speculation of rubes that think it will gain value, and its function is to gain value by speculation. It doesn't lead to anything, it doesn't produce anything, it doesn't enable anything- it just consumes electricity on the magnitude of small nations, and it doesn't get any more valuable for it.
Using cool math as the engine to facilitate commerce sounds rad as fuck, but it won't get adopted for the same reasons that your parents go into their insurance office to pay their bills, the same reason that you don't have wifi-enabled LED bulbs in your light fixtures, why PC gaming isn't done predominantly on Linux, why the "Microsoft is calling to remove spyware on your PC" scam works, or why the Segway wasn't a massive hit.
Shit, a Segway is more reparable. You forget a password or your hard drive shits the bed? Goodbye, currency.
I guess, to pull this back to the whole IRS thing- it's probably about as taxable as lottery winnings are, if you'll excuse the hows and whys any given person might gain a tax-significant amount of wealth via cryptocurrencies. It's not like any particular thing is done to create that value, but when you cash it out, the fed wants their pound, right?