According to Bitrawr.com, despite the recent bitcoin ban in China, the country still has at least 145 bitcoin nodes. While central companies such as BTC Exchange Hubi and e-commerce shop Alibaba are withdrawing bitcoin-related services from Asian countries, the distribution system itself, like the Bitcoin network, may remain stable.
On September 24, the People’s Bank of China (PBoC) re-posted a memo from September 15 calling for a nationwide ban on bitcoin and cryptocurrencies. The country’s leading financial institutions help the PBoC to keep Chinese citizens from trading assets.
Regulated financial institutions, by definition, comply with the laws and regulations of the country in which they operate. Their centralized nature allows for easy application of the law and direct accountability. A central source of information and truth gives details of all activities and transactions with and by the organization. As a result, two prominent companies have already announced their partial or complete withdrawal from China.
Bitcoin exchange hubby said in a statement on September 26 that it will gradually retire existing user accounts in mainland China by December 31 and will no longer open new accounts for users in that region.
Ecommerce giant Alibaba has also announced similar measures. The Chinese group has said it will stop selling bitcoin mining equipment on all platforms it controls, as well as other bitcoin-related products and services.
However, shutting down distribution systems is not as easy as centralized systems. By definition, peer-to-peer (P2P) networks have multiple data sources. To shut down a P2P system requires shutting down all of its participating colleagues.
It is unclear whether the Chinese government will try to shut down the 145 bitcoin nodes currently operating on their soil. According to the memo, it appears that PBoC will focus on isolating on-ramps in BTC rather than networks, closely monitoring and enforcing exchanges, websites and financial institutions in their efforts to deal with Bitcoin.
Bitcoin is a decent P2P network that is low cost for node spinning, which anyone is able to run on their own, ensuring that the government banning it will not have a lasting effect on Bitcoin’s ability to stay and run. In this sense, the Chinese ban could be a good thing for Bitcoin, as it helps to display the distinctive features of all networks, including antifragility and censorship resistance.
However, all 145 nodes accounted for by Bitrawr.com are running on the open web, which means the Chinese government can track their Internet Protocol (IP) addresses. With their IP address, China can determine their location and identity and efforts to block them will probably not be too much.
But Bitcoin also has the answer – Tor. Allows anonymous network users and bitcoin nodes to connect to the Internet while obscuring their actual location. Tor does this with its onion network, a series of layers, or hops, which try to preserve the user’s true identity and location. While not perfect, the Tor network provides a good alternative for people facing censorship to use their preferred services, including Bitcoin.
The Chinese Great Firewall went a long way in preventing users from connecting to the Tor network. However, options for using the Tor Bridge exist for those in Asian countries who want to avoid censorship. More importantly, if done correctly, the use of Tor on Bitcoin can help the Chinese people to enjoy true financial freedom from the communist country, when they give no such indication to the authoritarian government.
In fact, and for this reason, the actual number of bitcoin nodes operating in China may be much higher than 145, but we do not know because of the Tor network.