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As I understand it there is no central network. So nodes inside the firewall only see internal transactions. Nodes outside the firewall only see external transactions.

As a result, both sets of nodes create long chains based on the transactions they see.

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Yes but the 2 chains cannot be merged, the longer chain is the true chain, so all the transactions on the shorter chain get cancelled. Essentially the users in the fire walled country would revert back to where their transactions and balances were in n they day they diverged. Good for some, not for others.

So if China firewalls and keeps mining they could take over the chain?

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