"Indeed, the number of regulatory bodies taking a shot at classifying Bitcoin keeps rising: FinCen, the Treasury's Financial Crimes Enforcement Network ruled in March that Bitcoin money transmitters must register with the government, and that the Texas ruling itself was borne of an SEC enforcement action.why the Justice Department's crackdown on another digital currency meant increased regulation was likely."

Businesses actually WANT this because it brings LAW into the matter. For survivalists looking for an anonymous money medium Patrick Murck, chief counsel for the Bitcoin Foundation, (an organization not connected with Bitcoin) warned against "'Bitcoin magical thinking" the idea that you can run a gambling ring or a Ponzi scheme or anything else outside the law just because it is done with Bitcoin.

However, the article cited here does quote Alan Silbert, the CEO of luxury goods site BitPremier: "Bitcoin is international. The US has only 5% of the world's people and there will be many countries with more favorable regulatory attitudes towards Bitcoin. Companies can move to a more favorable regulatory climate if it got that bad in the U.S. And of course Bitcoin is decentralized and can't be shut down anyway."
Read more: http://www.businessinsider.com/reaction-...

Is it possible for the government to monitor the internet transactions? They may not be able to attack it physically but if they contemplate the ability to enforce sales tax on internet purchases does it not stand to reason that they could track and tax the users, or worse?

The same way you can't guarantee that the USD wont burst.

The government can't ruin it. They can't do anything as it's completely anonymous. The government can't freeze it or even touch it because it strictly runs by peer to peer. Which is why it's becoming such a big deal.

They already did, by running report about it on CNN. Anything CNN touches....

I very much like the concept, but fear some government, probably ours, will find a way to ruin it...

At initial glance, this looks interesting.
I will be looking into it further.