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Censorship resistant payments.
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cryptocurrency has the potential to make taxation quite difficult.
These are the only type of answers that come up to the question, what are Crypto currencies actually going to be used for? What use case do they solve?
These arguments only hold up while the number Crypto currencies transactions are at a nuisance level for tax avoidance/criminal activity. If the use of Crypto raises to the level that there is significant volumes of traffic on it, the semi-anonymous nature of it will be clamped down hard on.
There are many ways to do this.
It's a straight forward job to identify people involved in Crypto currency transfers. It takes a little time and effort, but how to do it is known and straight forward. The majority of people that have or have had Crypto coins at some time obtained them through public exchanges that require KYC information to be held on them. With a little paper work the relevant authorities can get that information. From these people it is then just another step to identify any unknown people who traded with the 'known' wallets; rinse and repeat.
An even easier way to kill off Crypto is something as follows. For example, every single international money transfer into and out of China has to be registered with authorities; failure to do so is a serious criminal offense. Using this, make a handful of transactions from a non Chinese Crypto wallet into a number of different business in China. Wait for a couple of weeks to see that the transactions are not appropriately logged as international money transfers. Send a bunch of cops to grab and throw the owners of the business in jail; publicize it everywhere. The idea is not to send them to Jail permanently, or even to convict them, rather make it too dangerous and or too inconvenient to be involved with Crypto in anyway. Is this legal, moral? Is this coercion? Possibly, but do you really want to be arguing this with a judge while you sit in jail for an unknown amount of time?