In short, it can be said that you can't. You cannot hide yourself and your friend's dialogue is right that your ip address is your tracking to them. So it us easy for them to find out you in this world.

Yes I am highly agree to you my friend. What did Satoshi is a great technique back then because he was the founder of bitcoin and yet nobody was able to track him down or find him co'z he was great at hiding but today if and only if he shows up, there will be a person who can track him down because of the KYC method and also nobody can say if he is still active here in crypto world because he can use random names.

Until you go to exchanges that will asks KYC. This is how you will not get away of the KYC.
Or encashing BTC going to bank account will then require him to submit data. There is no escape to this process already unless you just sell your coins to someone you will be meeting in public and he brings load of cash with him.

Right now I don't know if anyone just gave up all his coins in the exchange just so he won't submit KYC documents.

Satoshi didn't move his coins from the well known wallets because people will track down his every move if he does then despite that KYC was not introduce by the SEC and if he had move those BTC his identity will be reveal by now. In other for him to keep his anonymity secure he have to sacrifice those coins.
With that been said, the pseudoanonymous in nature of bitcoin didnt mean people can not hide their identity 100%.

Bitcoin is not entirely anonymous. It is anonymous in the sense that the components of Bitcoin, such as addresses, private and public keys, and transactions, are all read in text strings, such as a public address, that in no way directly link to anyone's personal identity.Since users usually have to reveal their identity in order to receive services or goods, Bitcoin addresses cannot remain fully anonymous. For these reasons, Bitcoin addresses should only be used once and users must be careful not to disclose their addresses.

Aren't the mixers sufficient enough to mix your coins and make you anonymous on the internet while using bitcoins, I know someone with a lot of resources and time can still search and find you but for that you can aslo shift towards other privacy oriented coins like monero, right??
Also what I do is never try to transfer my bitcoins straight from exchange address where I use to buy and sell my coins for bank transfers and never send straight from my wallet to that address as it is the kind of thing that should be kept private and can easily throw away your identity.

Very simple, you can use various VPN programs that change your IP to another one. There is also software that makes your IP dynamic, i.e. it is constantly changing with each new visit to the Internet. Accordingly, the wallet will not be linked to a single address and you will be completely anonymous.

It's very hard to keep your identity completely hidden. Probably impossible to have it exactly 100%.

There are cameras that could be used to facially recognize you. Your disposable phone, unless it has all antennas removed, will send and receive information from and to the service provider it's been registered to (and even without it, AFAIK, a phone with battery in it could still send and receive information - especially if it's a smartphone, and assuming you're using Bitcoin with it... it most likely is). Just think about it - even without a SIM card you can still call 911, right? Even if you turn your phone to Airplane Mode, do you have any guarantee that it has terminated any communication?

What is the source of your Bitcoins? What if your government or a third party has been doing blockchain analysis for a long time and your identity has been easily found? Mixers do not hide your identity 100%. While it hardens the analysis process and makes tracking your coins a pain in the arse, it does not mean it's impossible to find who the owner truly is. With enough resources and time, someone looking after your BTC address may link some crucial information to find your identity.

There's more to it. It's just that, while you do improve your privacy, you never push it to perfection. There's always going to be some leakage you may not even be thinking about, yet important enough for authorities or someone tracking you.

Edit: Tor does not hide your identity either, if you do not use it the right way. First of all, a lot of people use it with JavaScript enabled - which is just enough for your real device's information to be leaked. The thing is, you're mistaking anonymity for pseudonymity. It's not anonymous. It's not like I send you 0.001BTC and nobody knows who sent money to who, or how much. The ledger is entirely public, which means that once data is stored, it's going to be there forever. In other words, any little mistake is going to be recorded without the possibility of reverting it. It's just like our usernames on here: you have usernames, you're not sure who is who.. but with enough research, you may find out. We're just pseudonymous - not anonymous.

Previously the official website of bitcoin contained the phrase anonymity, but they later removed them. It's not possible to anonymize conventionally, but there are many ways it can be used to remain anonymous. I listened to the TOR network and the mixer, those are the two best ways to combat IP tracing the best.

As bitcoin is a decentralized coin, basically it is not possible to trace the transaction. We are unable to find who is sending and who is receiving it. Both users are safe and hidden.