The narrative that China could gain control of the majority over the Bitcoin network’s hashrate has been around for a while. Although many large-scale mining centers are based in China, it is not as simple as taking over all of the miners in the country.
It is extremely complicated, costly, impractical, and essentially impossible to attempt to gain control over the mining power required to attack Bitcoin.
In a recent op-ed published in The Hill, Chris Larsen, the executive chairman of Ripple’s board of directors, claimed that China has access to the majority of miners of various cryptocurrencies and could therefore potentially block or reverse transactions. He wrote:
“At least 65 percent of cryptocurrency mining is concentrated in China, which means the Chinese government has the majority needed to wield control over those protocols and can effectively block or reverse transactions.”
Major cryptocurrencies like Bitcoin use a Proof-of-Work (PoW) consensus algorithm that requires miners to verify transactions. In a PoW system, when a central party gains 51% of a network’s hash power, it could attempt to rearrange blocks and potentially reverse transactions.
“The effort to do so, which requires a massive covert operation of chip fabrication, then the coordinated assault that would give them dominance over the next block over the ten minutes, until we kick those bastards off the network, rework the protocol around them, they would be revealed, lost a billion dollars doing this, and all they got to do was one double spend.”
China is a major center of mining due to its dominance over ASIC miner manufacturing and the availability of low-cost power.
Just because there are mining operations in China, it does not mean that hardware can be seized, and it’s even more improbable that it gets used to block or reverse transactions. Mining operations in China are owned by private companies or individuals, and seizure would essentially mean the end of private enterprise. The odds of that happening are the same as the US: zero.
Addressing Larsen’s claim that the Chinese Government-subsidized vast amounts of energy needed to fuel cryptocurrency miners, Samson responded, “Chris Larsen is a few blocks short of a blockchain. The Chinese government does not subsidize the mining of Bitcoin or any other cryptocurrency – I’d love to see his sources that state otherwise.”