That's a naive view of networking. The physical location of an IP address can be very difficult to track down (and of course IP addresses aren't part of the bit

That's a naive view of networking. The physical location of an IP address can be very difficult to track down (and of course IP addresses aren't part of the bitcoin protocol). Bitcoin is also super low bandwidth, and it would be very easy to build a custom proxy to circumvent the firewall. We are effectively talking about 3 megabytes (or even less) every 10 minutes (5 kBps). It could also be obfuscated with stengraphy rather than encryption (e.g. a valid webpage, where the spacing, or css properties are the (also encrypted) bitcoin blocks).