With 70-80% of mining concentrated in big datacenters in China, it's very easy for Chinese officials to control the current implementation of Bitcoin.
The chinese officials weren't getting access to the mining farm has managed by the private companies.
If transactional throughput issue is resolved and Bitcoin can grow technically beyond the current crippled implementation, the Chinese mining datacenters will have to comply with whatever requirements they receive from authorities. Most likely requirement is to allow processing of only whitelisted transactions from identified users, the rest of transactions blocked. At this point Bitcoin should fork off from sha256 hashing or lose its purpose. At this point altcoins that do not depend upon Chinese mining datacenters will take a nice market share from Bitcoin, the idea of cryptocurrency won't die with Bitcoin going under.
Okay, this makes sense for me, and will be supporting about the first sentences had written by you.
Regulation has released by chinese = Respect or not(they will seize it).
