VPNs And geo-blocking in The Cryptocurrency World
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Among other things, cryptocurrencies brought one thing to the spotlight that’s been haunting the financial exchange for a long time: the problem of control and independence. Centralized financial structures proved to be unstable, and the level of control they exercise upon the consumer frequently seems like way too much.
Various governmental (and private) institutions are struggling to release regulations by controlling crypto markets, even though crypto is steadily making its way into the public sphere. By limiting the availability of access to particular regions, geographical restrictions are one way of doing that.
For example, BitMEX – Bitcoin Mercantile Exchange – cryptocurrency exchange and derivative trading platform is not available in the United States. Considering that BitMEX processed transactions as big as 1 million BTC in a daily trading volume, the denial of access to this platform is a significant disadvantage to US crypto-traders.
Previously we’ve elaborated on the importance of using a VPN to add additional security and privacy to your crypto transactions. Nevertheless, there are more ways to benefit from a VPN, like NordVPN, when it comes to cryptocurrency, like accessing previously unavailable markets for better exchange rates.
This concise guide focuses on geographical restrictions imposed on crypto and how to avoid them via a VPN.
What are geographical restrictions?
Geographical restrictions, or geo-blocking, is a technology that limits access to online content based on the user’s physical location. Streaming services are a perfect example. Netflix users from Germany will get a different (and smaller) content library than the US, and some services, such as cryptocurrency markets, can be unavailable altogether.
This is achieved by monitoring users IP address and measuring end-to-end delay (the time required for a data packet to travel from point A to point B) to obtain users’ geographical location. Once the geographical location is verified, an interested party can issue IP address blocks or even further gather device fingerprints and follow user online restricting access.
How do VPNs bypass geographical restrictions?
VPNs are considered the number one go-to software for geographical restrictions, and they solve the problem very efficiently.
First of all, VPN obfuscates users’ original IP address, linked to the actual geographical location and replaces it with an alternative one. So tracking a person online via IP address becomes significantly problematic. They do it by rerouting online data traffic through one of its servers instead of letting it go through the Internet service provider, which is also an excellent boost to online privacy.
The end-to-end delay is also resolved because the VPN server becomes a starting measuring position, and the delay time is reduced depending on how far that server is from the target destination.
When it comes to obfuscating browser fingerprints, VPN is only a part of a broader privacy protection software, such as timezone spoofers, browser user agent switchers, and so on, but this is a topic for another time. Let’s take a look at the situation of geo-blocks in the crypto markets.
Geo-blocks affecting the crypto industry
As mentioned previously, BitMEX USA restrictions are one of the best examples of geographical cryptocurrency blocking in the States, but it’s not the only one.
Another notorious example is Coinbase, the largest cryptocurrency exchange platform in the United States. When the company went public, it reported 43 million verified users and net revenue of 1.14 billion US dollars in 2020. You can find the list of Coinbase supported countries here.
As you can see, some major markets, such as Russia and China, are missing. We’re not here to debate the legitimacy of international politics, but this resembles an attempt to control and regulate crypto markets from the cryptocurrency point of view.
And centralization and regulations are what cryptocurrency tries to avoid. Furthermore, VPNs take on this challenge in the cybersecurity industry. Providing safe and more open Internet access is what consumer-centric VPNs are all about.
Another example is Kraken, a US-based cryptocurrency exchange platform and a bank, which provides cryptocurrency-to-fiat-money trading. However, once again, the service is geographically restricted, and apart from such countries like Sudan and Somalia, it’s also not available in Washington state and New York.
VPNs, like NordVPN, are one way of reaching these platforms, and many users do that with no problems. However, it’s always best to be cautious and double-check user reviews and first-hand experiences of the compatibility of one market or another with a VPN.
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