And how would that shut down Bitcoin?
Shutting down is likely impossible but Congress Critters talk it sound bites.
"shutting down" = make it extremely difficult to use and allow the network to atrophy.
They "shut down" Online Poker in the US. Now you still can play but they have made it so hard that the casual players ($$$$$) have all but dried up greatly reducing the profitability on regulars. In poker people of equal skill lose money in the long run playing against each other (it all goes to the house slowly).
So have they "shutdown" online poker in the US. Well technically no. I still have accounts on a handful of sites. I can still get money into them by sending $1000 by western union to a random person in vietnam who hand carries it to an affiliate who then drops notifies the poker site who updates my balance.
Have they "effectively" shutdown online poker in the US ... Yes.
So how could they "effectively shutdown Bitcoin" in the US?
1) Prohibit bank transfers to bitcoin exchanges (including Dwolla).
2) Require ISP to use deep packet inspection and drop Bitcoin packets.
3) Require ISP to report users running Bitcoin and send users a letter about said reporting.
4) Hold larger enterprises responsible for Bitcoin traffic (schools, companies, ISP, webhosting providers)
5) Actively engage in reporting and disruption activities (imagine casual user getting letter from FBI asking them to explain why their IP was relaying terrorist funds)
You forgot a couple:
-A smear campaign to demonize existing Bitcoin users and to discourage further adoption by the general public. Oh wait... Gizmodo!
-Apply internal pressures to divide and demoralise the Bitcoin community, thus killing the "idea" that it might actually work. In other words, things like: trolls on forums, dodgy businesses trying to scam people, suspicious market activity...
In my opinion, any official banning is unlikely without first creating a massive co-ordinated attack, hidden in the legalese of something like the multi-national ACTA. Politicians usually seem to be computer illiterate to an extreme degree, which is why I think non-technical warfare is the more likely course.
