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2) This means markets freed from even the theoretical possibility of regulation. Anything that can be digitized can be sold with no restraints save the absence of a willing buyer. Books, movies, VR epics, financial products, and all non-physical services can be traded without coercion (and without taxation). Remember too that "non-physical services" includes almost all management and professional services. The technique of "anonymous credentials" can be used to check out those you deal with.
There is no way you can get around taxation if you intend on using this system in real life. Your system is much like that of a drug dealer, he gets all this money, but has no where to spend it until it has been laundered. They will get you at the banks or wherever you go to spend your money. The "War on Drugs" has really caused this kind of banking service to dry up, and unless you are moving millions of dollars a day no one is going to even look at you if you want to make your money untraceable...
3) The lack of regulation in the "spiritual realm" will distort market transactions in the still controlled "physical realm." People will tend to "unbundle" the non-physical aspects of their services and sell them on the nets even if it is less convenient to do so because of the *tax* savings.
Death and taxes. You can't escape them, so lets drop that fantasy and concentrate on the rest. Your digital/untracealbe/untaxable cash can only purchase items from this shadow world of non-physical things, and that just doesn't pay the rent or put food on the table. The appetite of the taxation-beast will not diminish, and everyone will just end up having higher taxes on the physical elements of daily life that can't be stuffed on the wire. Sounds like this is going to be a world of info-elite tax dodgers...the public will love you... The unbundling of the physical and non-physical aspects are nice, but how many non-physical aspects of a service are there? There are a lot of things that can be done through a network, but there are still a lot of things that will never escape thier own tangibility; these are generally the things in life one cannot do without, like food, shelter, etc.
4) The reduction is government "revenue" as economic activity transfers to the nets will induce a beneficial downward spiral in the authority and power of government.
Yeah. Right... If only it were true... jim