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The simple answer is yes and no.
Most users would only be able to trace you as far as your ISP but in some circumstances your ISP might identify you to others.
For example, if you libelled someone in a chat room your ISP might face a court order to identify you.
What you look like online
When any computer goes on the internet it is given a unique identifying number called an IP number. IP numbers look like this 212.58.224.122 (That's a computer at the BBC!).
Strangers looking at an IP will be able to tell you're in the UK, and which service provider you use, but little else.
Sometimes, for example if you use broadband, your ISP will give you the same IP number all the time.
But, if you use a dial-up account you would normally be allocated one of their free IP numbers randomly when you logon. Your ISP keeps a record of who was using which IP number and when.
IP Tracing
When you are chatting your IP number is recorded. With IRC this is by the IRC server you connect to and with web chat it is recorded on the website that has the chat room.
Let's say you connect to the internet through BT Openworld.
The IRC server logs would record that BT Openworld user with a specific IP number, let's say 212.58.224.145 connected and it may also record your actions - perhaps occasionally even with a transcript of the chat.
BT Openworld are not going to say who was using that IP number to anyone, but they would have to disclose it if someone got a court order forcing them to.
This might be because someone has been libelled or because criminal activities were being discussed.
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