CTMfile’s item ‘Islamic state allegedly uses Bitcoin for secret transactions’ generated many views and one question “Aren’t Bitcoin transactions traceable?” 

The answers varies depending on who you are and what you believe about the fraud control arms race.

Recording each Bitcoin transaction

Every Bitcoin transaction is public and can be viewed by anybody, see https://blockchain.info which shows the live dashboard of every transaction in the network as it happens:

Source & Copyright©2015: BITCOIN 

But as this screenshot shows the transactions don't carry any identifying information. A Bitcoin transaction message is effectively an instruction to the system to move funds from one numbered bank account to another with no other information attached. 

Tracking the value transfer chain

Theoretically the authorities could:

• combine these two facts, to produce a map of the funds flow from account (Bitcoin call them addresses) to another account , but only 
• if they could identify the owner of any of those accounts (called Bitcoin addresses) then
• they could begin to work out who, e.g. Bob has paid money to an anonymous account, they could force Bob to tell them whom he sent the money to
• and so on through the whole value chain. 

This is not easy, but theoretically possible.

However, CTMfile understands that there exist services that will "mix" transactions together for a fee. So ISIS could pay to have their transactions mixed in with lots of other transactions when it would become almost impossible to figure out who they paid OR received funds from.

Bitcoin fraud control arms race

Monitoring fraud in the Bitcoin infrastructure and technologies are a whole new paradigm. One Bitcoin expert described this process as something like entering a new arms-race. The bad guys get better at hiding their tracks and the law-enforcers have to get better at implementing techniques to unmask them. And so on.