Hmm--interesting. This whole thing is a bit weird to me. Wasn't Bitcoin supposed to be untraceable, uncontrollable, unable to be confiscated, un-taxable, and outside the reach of any government?
Or maybe all that was simply empty hype?
If you use it carefully and the government doesn't get hold of your computers containing unencrypted bit-wallets, then yes. The claims are correct, to a degree.
But the transfer of Bitcoins between wallets is completely transparent and easily traceable. If they find out which wallet is yours (such as checking whose bank account is being used to buy more or sell off the Bitcoins in that account), they can easily watch how many Bitcoins are passing through your wallet and where they're going.
(There are anonymous services that can disguise where the Bitcoins are coming from and going to, but they charge a fee, and there's no way to be sure they won't keep all your Bitcoins for themselves.)
If the government gets hold of your computer, and your wallet is on it (and not password protected) they can just pretend to be you and transfer the Bitcoins to a government wallet.
If it
is password protected, they can always try to crack the password or, more simply, pressure you to hand over the password with threats of pressing extra charges.
The only way to be absolutely sure your Bitcoins are safe is to keep the wallet on a storage device or piece of paper and hide it somewhere they'll never find it. But that's inconvenient for you, because you'd have to retrieve it every time you want to use it, and they could always pressure you to reveal its location.
If you keep your Bitcoins in an exchange, its easy for them to get hold of them, they just have to force the exchange to turn over your account, exactly as they would with a bank account.
).
