If the government decides to investigate you, they can still easily find out, by asking the KYC exchange, how much Bitcoin you purchased and when.

They will also be able to see that you sent it somewhere, that you paid a lightning invoice.

I guess you can claim you later lost the coins.

And it will be very hard to prove you did not.

I guess they can say capital tax gain tax is due anyway, as they know you had Bitcoin.

Who knows what is going to happen and how tyrannical the governments may become.

But also, in another future dystopian scenario, to legally spend or sell Bitcoin, you may be forced to show the source of funds!

If this happens, KYC-ed Bitcoin may be "better" and non KYC-ed you will only be able to sell using shadow peer to peer markets, probably at discount, like an illegal good.

We just don't know. I may be too pessimistic.

Of course I hope none of this happens, we will have freedom respecting governments everywhere and Bitcoin will be tax free.

I wonder what others think on this.