Governments need to grasp the concept of crypto currencies well before regulating them. Moreover, bitcoin cannot be regulated or you can put it the other way around, investors do not want that at all. Transactions of decentralized coin are almost impossible to track. But if governments plan to introduce its very own digital currency for people of their country, they can do whatever they like to with it.
Well that's where you are wrong, a decentralized transaction could easily be traced back because all the transaction are recorded in the blockchain it's not anonymous once you know who have that address even you can trace them far back. however I agree that government need to have the grasp of crypto and blockchain aswell because as I see those people usually just release a regulation based on their thinking which usually lacking in term of technology. Should have some people with IT background to advice the regulation.
Blockchain means having a chain of blocks that are ciphered. But if this chain is a long one and transactions made by one person utilizes different nodes every time and all the process is basically using cryptography, what computers on earth can decipher them and trace out the starting point. The system is a way too complex. A simple deciphering demands a lot of computing power. This is blockchain we are talking about. So bitcoin is impossible to trace one way or the other.
