Bitcoin Bans

As of 2024, approximately fifteen countries have implemented absolute or near-absolute bans on Bitcoin. The list has included China, Algeria, Bangladesh, Bolivia, Egypt, Iraq, Morocco, Nepal, and others.

The pattern of what happens after a ban is remarkably consistent.

Short-term: trading volume on regulated exchanges drops. Some users leave the market. Headlines declare Bitcoin dead in that country.

Medium-term: peer-to-peer trading picks up. VPN usage increases. Underground markets develop. Remittances continue through informal channels.

Long-term: bans are often quietly reversed or enforcement lapses. The economic pressure of being outside a growing global financial network proves more costly than the problem the ban was meant to solve.

China is the most dramatic example — six attempts at various levels of restriction, each overcome. The 2021 mining ban was the most severe and drove a genuine short-term disruption to the network’s hash rate. It recovered completely within months.

The structural reason bans are difficult is that Bitcoin has no headquarters to raid. No server to seize. No CEO to arrest. Shutting down Bitcoin in a country requires monitoring and prosecuting individual peer-to-peer transactions — a surveillance task of enormous scale.

Countries that have embraced Bitcoin — El Salvador, the Central African Republic — have attracted more attention, capital, and business than those that have banned it. The regulatory arbitrage is becoming visible.

Tomorrow: governments that embraced Bitcoin — the other side of the ledger.

— The Daily Bit