Short answer: They can.
But what you actually meant to ask is: "Will gov't banning of cryptos be effective?"
Answer: Hell no.
Let'stake a look at Venezuela.
They basically jailed anybody who has anything to do with cryptos there.
Technically, only mining is illegal. But the secret police still arrest (beat up) anybody caught owning them.
So what happened?
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Cryptos went underground...
And it became a nightmare for the gov't.
Let me repeat that.... it became a nightmare for the gov't.
To understand that, let's take a look at drugs for example. Drug smugglers will always leave some sort of evidence. A police K9 can sniff them out. Or they can follow the trail of cash that can't completely be hidden. Ergo, drug cartels can be caught.
That's the downside of smuggling a "tangible" product.
That's why they spend billions bribing politicians and police chiefs. That's how they can continue operating.
Now let's take a look a cryptos...
A "non-tangible" product. Crypto Smugglers in Venezuela, literally erase ALL traces of cryptos, and walks into the country remembering only 12 words....
Let me say that again. There are absolutely NO traces of cryptos on them, only 12 words in their heads
Goodluck with that.
As for Venezuela banning Mining
The miners adjusted. They are now completely underground. They have managed to reroute electric sources split between neighbors, to remove high electric usage traces. The neighbors get a cut too. And it is in the best interest of the neighbor keep the operation going because they too, are starving. The masses are starving in venezuela right now. And crypto miners are feeding them!
There is something fucking wrong with the system if people are smuggling food in the country. FOOD! Goddamn food!
http://www.businessinsider.com/venezuelas-food-shortage-keeps-getting-worse-2015-8
Now if the US gov't illegalizes cryptos, it will drive it underground.
And it will be a nightmare.
They won't do that. If they could, they would've already done it.
A better way for them is to regulate the exchanges and at least, they can monitor the cryptos and its buyers.
Remember, the rich have already uncovered the power of decentralized cryptos.
The difference between the rich and the rest of us?
The rich are excellent at protecting their money from taxes, while the rest of us are being stolen from.
They hide it inside corporations....
Now let me get this straight, I am NOT anti taxes. I am against using taxes to kill people in other countries.
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Don't be naive...
when Sadam, Gaddafi and Mubarak decided NOT to use the almighty "petro Dollar" in their oil industry anymore, they felt the whole power of the US military screw them over.
That's basically the explanation of our current wars if I were to describe it in one sentence.
So I will say again: taxes to build roads, infrastructures and all that... sure!
Taxes to send our 18 year olds to kill other 18 year olds in other country JUST TO STEAL THEIR OIL? No no.
Back to the rich.
A lot of the rich are quietly converting their money into "untaxable" cryptos now.
Of course they will keep it a secret. You will never hear about it.
And a lot of them are in positions of power.
That's the thing with cryptos, it will help everybody, including dirty politicians. Even the banks and corporations have started investing (hiding) their stash in cryptos.
Now here's the thing: cryptos will only kill the banks. The Corps and the gov't, in the other hand, can integrate blockchain in their system... and thrive!
The gov't know that blockchain is the future. Just like they knew Internet was the future in the 90s.
That's why sillicon valley is here, along with the biggest companies in the world (google, facebook, amazon etc etc)
Now imagine if they strangle blockchains (in which every blockchain has a currency that comes with it... as a reward, or else nobody mines it or supports it), companies will move overseas to more blockchain friendly countries.
As proof: with Australian banks strangling cryptos, it just took a few companies to threaten to move to other countries for their gov't to bow down.
https://cointelegraph.com/news/australia-moves-to-remove-double-taxation-on-digital-currency
Crypto Companies made threats to move to UK, and suddenly they lifted the theft... err, I mean taxation... yeah.
Same thing with the US, most companies now like google and microsoft have plans to integrate blockchain into their system. Good luck banning them lol.
Now some may counter: Gold reserve act of 1934 or the Chinese firewall...
Let's take a look at those.
The confiscation of gold mostly happened in the banks. The war-paranoid ones buried their metals somewhere in the woods.
The people who trusted a centralized entity (banks) got their gold stolen. The people who hid their shit, got away with it. (They didn't have the man-power to investigate everybody)
The fearful ones though, dug up their shit and willfully submitted it to the gov't.... go figure.
But what's more important... the ones who took the responsibility of storing and protecting them, were able to keep it from being stolen by the thieves (gov't).
But you never hear these kinds of story. Bad publicity for our honorable thieves.
Chinese firewall...
You have to understand the Great Fire Wall (or GFW) never completely banned everything. It mostly banned sites with chinese texts.
It was meant to hinder the information delivered to the "lower classes" that can't read english. For they are the many and political oppositions wanted to use them to overthrow the current gov't.
It was basically a competition between political parties. A spat among kids. Stupid.
- BBC chinese was banned, but BBC English is accessible.
- Wiki english is okay, but wiki chinese is banned. Go figure.
You get the drill.
And people with little technical skills were able to bypass the GFW too. They can directly access google's main domain server (8.8.8.8 etc)
And don't get me started towards VPNs.
V.. fuckin PNs...
It's laughable they tried banning VPNs too. VPNs just evolved and adjusted and left them to rot :D :D
As for China banning the Exchanges
Chinese people will just buy from international exchanges. Their money will go to other countries. Unless China can move on with their "rumored" plan of using neo or qtum as their official crypto. And convince people to buy it instead.
China wants to have its own crypto which it'll have control over. At the very least, will have control over the staff and developers.
Some might be convinced to buy the official crypto and have their money stay within the country... but I predict alot of them will still buy other coins from international exchanges.
And it's already happening now. Chinese people are cashing out from chinese exchanges and buying from Japanese and South Korean exchanges instead.
Good luck with that, China.
Will China ban miners?
You mean the multi-million dollar miners that pays taxes, fees and electricity?
They will just move to Hong Kong, Macau, Taiwan, etc. They will just relocate to a mining friendly location.
Furthermore, Hong Kong and Macau remains based on Portuguese and British common law, and is considered free and impartial. The Chinese authorities have no right to arrest people in Hong Kong and Macau. Like other countries, they must apply for an international arrest warrant.
To summarize:
No, banning of cryptos is NOT effective. Will never be.
Blockchain is the future. If US bans them, the next wave of big tech companies will transfer somewhere else.
The US tech/internet companies earns trillions of dollars. Goodluck threatening them.
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