>I believe the distributed ledger is public, so anyone (incl. Govt.) can see which wallet address has how much coins / funds in it.
Not only is the wallet address public you can see entire transaction history of each address. Keeping a Bitcoin address separate from your true name is exceedingly difficult.
1. When you trade Bitcoins into fiat money with an exchange you reveal your true name.
2. When you purchase something with Bitcoin you reveal the mapping between your Bitcoin address and your mailing address.
3. Unless you are using TOR when you announce a transaction on the network you reveal the mapping from IP address to Bitcoin address.
4. When someone sends you Bitcoins they can track how those Bitcoins and spent and what Bitcoin addresses they are moved to.
5. Companies have large databases of known identity to Bitcoin address mappings allowing process of elimination or guilt by association privacy attacks.
"Bitcoin offers privacy—as long as you don't cash out or spend it" - PC World
Disclaimer: I do Bitcoin privacy research.
Not only is the wallet address public you can see entire transaction history of each address. Keeping a Bitcoin address separate from your true name is exceedingly difficult.
1. When you trade Bitcoins into fiat money with an exchange you reveal your true name.
2. When you purchase something with Bitcoin you reveal the mapping between your Bitcoin address and your mailing address.
3. Unless you are using TOR when you announce a transaction on the network you reveal the mapping from IP address to Bitcoin address.
4. When someone sends you Bitcoins they can track how those Bitcoins and spent and what Bitcoin addresses they are moved to.
5. Companies have large databases of known identity to Bitcoin address mappings allowing process of elimination or guilt by association privacy attacks.
"Bitcoin offers privacy—as long as you don't cash out or spend it" - PC World
Disclaimer: I do Bitcoin privacy research.