Bitcoin transactions are nameless. however most exchanges these days requires a verification of your records with the intention to alternate Bitcoin to fiat. So it is miles viable most effective the exchanges.

I think government can't trace you because bitcoin designed to protect privacy it nonetheless generates abundant public data. Many Investigators try to connect the transactions publicly recorded but they didn't connect.

The only way for the government to discover that you owe bitcoin is you will give them your wallet address or you will declare it that you own one. For as long as you will keep your mouth shut about it then no one knows that you are a bitcoin holder.

There is no identity on bitcoin and so no one would reveal its identity on bitcoin to make itself safe and secure but if you reveal your identity then the cyber crime officers would trace you and they have some special techniques for that to identify you.

The various ways you can be traced by government are:
1. fiat to Bitcoin exchanges that requires KYC
2. Trading excahanges that require KYC
3. email registration required for some wallets
4. IP address
If the above identity pointers (among others) are accessible to the Government,  the person may be traced. However, in my opinion,  the main essence of Bitcoin, is to personally secure your funds without 3rd party interference. Complete anonymity can be achieved by using coins like Monero, Zcash, etc.

Perhaps the government can track BTC when banks use btc as proof of their transactions may be new government can track the existence of btc maybe that's the only way to be able to track the existence of btc

IPs address can be tracked by government and our bitcoin transaction can be trace. And if government can not identify the owner, government can make regulation to their citizen to report their ownership.
Government have power on our life and if used for illegal activity its very easy for government to track it down

Bitcoin uses cryptographic technology and this makes it near impossible to track its tracks. Bitcoin wallets are not tied to the identity of anybody neither is it tied to a particluar location. So this alone will guarantee maximum anonymity and more privacy.

Algernatively, you can move to coins that have more privacy like Dash, Verge, Monero, Pivx etc. These coins guarantee more privacy and  they are not traceable.

How can bitcoin be traced? Bitcoin's privacy properties are a kind of paradox: Every Bitcoin transaction that occurs in the entire payment network is recorded in the "blockchain," Bitcoin's decentralized mechanism for tracking who has what coins when, and preventing fraud and counterfeiting. Can you be taxed in bitcoin? Bitcoin Are Not Money for Tax Purposes. Although Bitcoin can be used like money, they are not considered to be money (legal tender) by the IRS or any other country. Instead, they are personal property, much like gold or corporate stock. ... IRS Form 8949 is used to report capital losses and capital gains. So dont worry if government traced you.

first and foremost, the Bitcoin is a decentralize which also has a peer to peer transactions. Unless you say it yourself to the crowd that you are a Bitcoin user.