[Cryptography] Bitcoin, fork you very much

[John Levine]

Let's say I'm with the Chinese government and decide that I am tired
of people evading currency controls and money laundering with Bitcoin.
So we adjust the Great Firewall of China to block port 8333.  We also
add some MITM proxies that take newly mined blocks from the Chinese
side, rewrite them to put the newly mined btc into government-approved
wallets, fill up the blocks with transactions from outside China, and
send them along.

Since a large fraction of the miners are inside China and all of the
hard currency exchanges are outside, this is a pretty serious fork.
No doubt people will start trying to evade the block, but the the GFoC
works pretty well, and any evasion will take a while to start being
effective.  It'd also be easy to tell who was trying to evade (look at
the blocks in the chains they publish) and send someone around to chat
with them.

Even if the two sides are eventually reunited, then what?  It'd be
obvious which blocks had been rewritten, but even if there was some
improbable global consensus to disregard them, what happens to all of
the transactions?

Am I missing anything important here?

R's,
John