Bypassing Blockchain GeoIP Bans through VPN Use


The following article was written by Chris San Filippo of the Hotspot Shield Marketing Team.

Over the course of 2017, there was a massive surge in both the use and value of cryptocurrencies. The most prominent of these, BitCoin, shot up from $1,000 to $20,000 within that year, while less widely-used cryptocurrencies saw more rapid increases in value.

Broader interest has also stoked fears, however. The volatile values of cryptocurrencies and the speed at which these have risen lead to wariness of an impending bubble burst. Furthermore, the anonymity it affords has regulators wary of its potential uses in money laundering, fraud, and other illicit activities.

Left to their own devices and analyses, countries across the world have adopted a range of regulatory approaches. For example, the EU has moved for stricter customer data disclosure in blockchain transactions in a bid to clamp down on money laundering and terrorist funding. China, while investing heavily in blockchain technology, has issued a ban on initial coin offerings (ICOs).

Given that part of the appeal of cryptocurrency is its potential for seamless and widespread use, the uneven regulatory landscape poses a problem. Cryptocurrency users can find themselves cut off from opportunities in foreign markets or may even run into problems simply using their digital wallets while traveling abroad.

Fortunately, one of the common methods for restricting cryptocurrency use, geoIP bans or geo-blocking, is easily bypassed. Geo-blocking prevents users from certain countries from accessing web content by filtering them based on the region associated with their IP address. By masking or altering the IP addresses, users can get around such restrictions.

One means of doing so is using a virtual private network (VPN). A VPN connects a user’s device with a server, which may be elsewhere in the world, then assigns the user a new IP address, rendering their actual IP address effectively invisible. Since users can choose a different region for this new IP address, they can effectively bypass geoIP bans. A user whose home address is banned could effectively work out of a different region; alternatively, a user travelling to a region with adverse blockchain regulations could use a VPN to effectively connect through their home region.

While some sites use VPN detection technology to reinforce their geo-blocking, there are ways to bypass this as well. One such method is using a polyserver approach: rather than committing to just one VPN provider or server, users can alternate with lower-profile VPN services or change server IPs within the same provider. Cycling IP addresses regularly also helps get evade VPN detection.

The importance of technology that maintains private actors’ control over their blockchain access will remain important as regulations develop. It’s likely that the regulatory environment on cryptocurrencies and blockchain technology will remain turbulent for some time yet. The repercussions of this will widen further as blockchain applications continue to extend beyond cryptocurrency. It has already found use in humanitarian aid and progress is being made on blockchain applications for digital image copyrights. Such uses may fall outside blockchain regulations focused on currencies, assets, and securities, so it remains to be seen how governments respond to these. Until then, it’s up to private parties to secure their blockchain resources.

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