In theory, each coin (called transaction output in bitcoin lingo) can be traced through a chain of transactions to its originating block. In practice, this is u

In theory, each coin (called transaction output in bitcoin lingo) can be traced through a chain of transactions to its originating block. In practice, this is useless because there is no correspondence between bitcoin addresses and individuals (except in certain points like exchanges that require your ID) In other words, each time a coin changes addresses there is a plausible deniability for the owner of the receiving address that s/he received the coin as a result of a legitimate transaction (sale of goods/services, donation, whatever)