It's a little bit more volatile than the responses have made it out to be, as far as I know. Now I don't claim to have written the software or understand its workings intimately, mind you, but as I understand it the situation is this: if they can track a single coin from a known point of origin anywhere, whether it's tomorrow or the next decade, they can directly and mathematically prove that you're tied to the activities you don't want to be tied to.The problem is that if anywhere along the way they manage to find out who someone is, then from that point on if all the coins aren't sufficiently dispersed and mixed and all that, it's just following a trail of transactions right up to your bank account -- I don't have the problem of cashing out as a buyer, so I don't know too well how you guys end up doing it, but at some point somewhere along the way you have to turn those things into cash and I doubt you're doing it by meeting up with local bitcoiners every Sunday and selling them a few thousand dollars worth of coins anonymously without raising an eyebrow.You're not being irrationally paranoid. It's possible that they could find you by transferring directly to a bitcoin address that you then turn into cash without sufficient mixing. This part is total conjecture on my end, but I imagine it's basically a matter of the coins having to criss-cross each other's trail so many times with so many branches that even a computer can no longer sufficiently calculate where it ended up (because there end up being thousands of possibilities for each coin branching off like moves in a chess game). But again, that's just my silly picture of it, I could be off by a whole lot. It does kind of give you an idea of how "not as anonymous as we think," Bitcoins really are.I'll say this though: for some reason, even though I do sometimes run the client software myself, I've never had my IP show up in the blockchain (and I don't always go through Tor). I like Bitcoins for their own sake. Anyway, for some reason I've never been the one first reporting a transaction, which makes no sense to me at all... because if I don't report it first, then who the fuck could -- I'm the one who sent the damn things. That makes little sense to me, so my understanding is obviously flawed somewhere or other. I'm happy to be schooled if anybody wants to spare the time :)