Getting Around Blockchain Geo-Blocking with VPNs - Chris San Filippo (13/02/2018)

February 13, 2018

Cryptocurrencies had a good run in 2017. The most prominent of these, Bitcoin, rose in value from $1,000 to $20,000 within that year, while some altcoins saw more rapid growth. While this has attracted a lot of new participants to cryptocurrency trading and blockchain endeavors, it’s also drawn the attention of governments, some of whom are less than enthusiastic.

Within the first few weeks of 2018, Chinese and South Korean regulators have made moves toward restricting cryptocurrency activity in their countries. South Korea’s government is preparing a bill to ban trading of virtual currency on domestic exchanges. Meanwhile, one Chinese central banker has called for a wider ban on services related to cryptocurrency trading in the country on top of their existing ban on ICOs.

Other states are likely to act within the near future in one way or another. Venezuela’s president has announced plans to use an oil-backed cryptocurrency to get around international sanctions. The plan is clearly a flimsy last-ditch attempt—claims of it being backed by oil or being a cryptocurrency at all are suspect—but does show that governments may take actions related to cryptocurrency other than banning it. Whatever the case, government involvement will mean an uneven regulatory environment for cryptocurrencies around the world.

It’s difficult to tell just what these policies might be, but if current methods are an indication, they will be mainly enforced through geo-blocking. Geo-blocking, also known as the use of geoIP bans, restrict access to web content by filtering users according to the region their IP address corresponds to. On top of the obvious problems this poses to cryptocurrency trading, it could also complicate the simple act of managing cryptocurrencies while travelling.

Bypassing Geo-Blocking

Because geo-blocking screens IP addresses, it’s easily bypassed through the use of virtual private networks (VPNs). A VPN creates an encrypted tunnel between a user’s device with a server elsewhere in the world. This effectively masks their actual IP address and, by selecting servers in specific regions, they can circumvent geoIP bans. Most VPNs allow for several IP addresses across various regions, rendering nearly all geoIP bans ineffective.

Some sites use VPN detection technology to enforce their geoIP bans, but there are ways around this. A polyserver approach, alternating among low-profile VPN services or different servers from the same provider, makes it more difficult for VPN detectors to keep a user out. Cycling your IP address regularly can also help bypass VPN detection.

It’s worth noting that in some countries, the use of VPNs is illegal. Also, beyond outright banning, the use of VPNs specifically for bypassing geo-blocking is something of a gray area. It’s widely tolerated—maybe even appropriate: geoIP bans between EU member states are illegal, so one might reason you’d be right to bypass any you find—but it’s best to look into the pertinent laws in the regions where you plan to use it for those purposes. Blockchain and VPN technology both give users a measure of freedom from restrictive forces, but users should exercise discretion.