China Has the Power to Cripple Bitcoin
China is in possession of the biggest threat to Bitcoin, and if it decides to use it Bitcoin could be in for one devastating ride. For a long time, China has influenced the crypto markets heavily thanks to its wealthy investors, but one area of Chinese domination is often forgotten – crypto mining. When combined, Chinese crypto mining operations control well over 51% of the total Bitcoin network hash rate. If the Chinese government suddenly decides to extend its crypto culling to the mining industry, it could wipe out the majority of the Bitcoin network hash rate in one fell swoop. This would cause chaos as transactions would begin to back up and other mining pools would rapidly control more of the network than previously thought possible.
This isn’t the only weapon in China’s hands either. China could demand that all crypto miners in the country surrender their operations to the government, meaning the Chinese government would then control well over 51% of the total network hash rate. If this were to happen, China could theoretically rewrite Bitcoin history, bringing the world’s leading cryptocurrency to its knees in the process.
China Against Cryptos
China has held an anti-crypto stance for quite some time now. In fact, China banned all commercial crypto activity and ordered companies to enforce this new attitude. In the wake of this new stance, Baidu – the Google of China – removed several crypto related forums and changed its search engine ranking algorithms to not show crypto related sites. WeChat has also joined in, blocking the accounts of major crypto firms including Bitmain and Huobi. This could strongly hint that if China was to use its weapons, it would most likely opt for kicking out all miners from China and crippling the Bitcoin network.
More Options for China
Interestingly, the Chinese government controls the country’s internet meaning that it could in fact double spend Bitcoin with relatively little effort. In this situation, it wouldn’t need to even have that much hash power under its belt. All it would have to do is send a transaction to several of the crypto mining pools in the country, but slow the data packet down on its way to a handful of other pools.
Blockchain Not Bitcoin
China isn’t completely against blockchain technology though. It has gone with the idea of blockchain not Bitcoin and while many see this as counterintuitive, it seems to be working in China. Local governments are being encouraged to use blockchain technology in order to make the regions safer and more prosperous. The Wuchang province has put its prestigious Wuchang rice on a blockchain in an effort to stop counterfeit products reaching the shelves, and another province has put its forestry management on a blockchain.
We will have to wait and see what China decides to do, but hopefully it plays nicely and doesn’t try to destroy Bitcoin. After all, Bitcoin has brought about the technology that its localities and citizens use daily to improve their lives and the country’s international reputation.