There is no way that any government could identify any wallet if they are not having any control over it, by banning bitcoin what they do is shutting all the exchanges and people will trade outside their jurisdiction and there is no way anyone would know who is having control over the coins and the users are smart enough to use a new wallet address every time if there is a serious consequence. The huge jail term suggested is to scare people to avoid taking those risks.

When it comes to mining the government can track down if the amount of electricity consumed is huge, unless it is registered for industrial purpose it is difficult to explain the huge electricity consumption.

By being careless, yes they can. If you are careful, and never reveal it to anyone, and use tor in your spv (ie. Electrum) wallet, they can never tell.

Mining is quite easy to detect and block unless you go with something like tor for that as well.

As for keeping the seed words safe, you could steno-graph them. By, say, taking some book and mark the words with a little mark or such. Possibilities are endless in how to hide 12 words in plain sight.

Most likely those caught would be because they revealed it online, and have ties online that link your username to your real name.

It is not easy to make a brand new online virtual identity completely untied to the real you, but it is possible. I would recommend the use of something like Tails for starters. Boot that from a dvd, and when you finish turn the pc off and its all gone. No traces in that pc.

This is not just India, but any of the other 15 countries that "ban" bitcoin. Don't let your guard down even if the authorities are inept and corrupt.

Obviously, the prohibition wouldn't be generally enforceable. As you point out, it could be easily circumvented.

The point of the law, though, is about deterrence. Government officials probably understand fully well the law isn't wholesale enforceable. There will probably be some "low hanging fruit" cases where users openly violate the law -- transacting with undercover police, for example. They could publicly prosecute these cases, hand down harsh prison sentences -- and this would scare the hell out of people. It obviously won't kill Bitcoin in India but the black market will be a tiny shell of the former white/grey market.

Like the Chinese government, they may just want to force VASPs offshore and cut the market down in size.

It’s not that someone will track someone’s address. In order for everyone to stop using the cryptocurrency for the government, it’s just necessary to close all the exchange offices that carry out the withdrawal of funds. And that's it.If no one can withdraw money to Fiat, then naturally no one will use a cryptocurrency.

Well, when the miners sold some fo their bitcoin they need to give the bank info, and the exchange could trace the addy where the bitcoins come and that could be the way that gov could know who are the miners.

If the miner never spends his bitcoins then he could stay anonymous, or maybe he could use a mixer service, but if India knows that you were using a mixer maybe they will send you more than 10 years to jail for money laundering.

The government can't stop the people from using Bitcoin but with the scare tactics they were imposing then people will have a choice to go under or do it outside of the government jurisdiction.

The government can't track someone's addresses unless if he does post it everywhere to make a name and that's what famous people do.

There's a lot of ways to bypass any banning if people really want to do.

If you are careless yes they can track you, but if you are en educated investors you know how to protect your assets, you know from the start that you are your own bank and you know you must protect it from hackers, government and from people you don't trust, this is decentralized there's no third party that will tell you that this guy holds this much Bitcoin.

The Indian government have not done enough research on bitcoin and how it works. Maybe they think it's like a Paypal. No one in my area knows I am into bitcoin except the ones I told, and my bank doesn't even know I deal on bitcoin. They get to see credit alert on my account without ever telling the source because there is no trace. The government will soon realize they are chasing shadows.

Well said, the mining firms can be easily tracked as the electricity consumption will be very high compared to the household usage. As mentioned if it isn't registered for industrial usage, then this is gonna harm the user with heavy fines.

These days governments too have made them updated to the technology and as a part they have begun to track the browsing details. When one is a cryptocurrency users, the internet itself gives suggestions on contents related to cryptocurrency. This might give a confirmation that this particular person is a user of cryptocurrency.

Technically, if bitcoin enthusiasts are using bitcoin the way it was intended to be used (that's through peer2peer transaction) they can't be tracked and possibly punished via jail term but since most enthusiast (including myself) operate using 3rd service providers like exchanges, wallet service providers etc they (the government) can easily track our every move considering the service providers have all it's customers private information which they most have gotten through KYC procedures.

This declaration by most country won't be followed up, there are just FUD used to decieve their citizens from participating in the bitcoin/blockchain technology.