every sat is perfectly tracked from the moment it is mined. what the government could do is get 51% by force and say "any bitcoin not owned by these addresses cannot be transferred. so you could send a transaction, and it might even get a conf, but then the govt controlled miners would orphan the block with your tx in it. boom, whitelist bitcoin controlled by governments.

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I'll have to set asside some time to read more about BTC.

Do you recommend any reading material that explains about the challenges of Bitcoin? I can imagine the whitepaper has something on this.