According to a recent study, China could have a series of potential reasons to attack Bitcoin (BTC). The research paper has been written by Ben Kaiser, Mireya Jurado and Alex Ledger of Princeton University and Florida International University. The Asian country could take such a decision in order to influence another foreign country and/or currency markets.
Could China Attack Bitcoin?
Bitcoin has been growing all over the world. Many companies and investors have embraced it. There are countries, such as Venezuela, where Bitcoin and other cryptos are being used every single day. If China wants to influence a country, it can do so by weakening Bitcoin.
For example, Michael J. Casey, chairman of CoinDesk’s advisory board, suggested that it could be positive for the Argentine Central Bank to purchase Bitcoin.
But why can only China influence crypto prices? China has an advantage over other countries. The majority of the mining pools are located in the Asian country. In theory, the government could control them and weakening consensus. This would clearly have a negative impact on the network, generating volatility and other issues.
China could have another reason to influence Bitcoin’s future. Since China is against a decentralized currency, they could weaken or destroy it so as to make an ideological statement.
The report reads as follows:
“Bitcoin stands in ideological opposition to China’s centralized governing philosophy, so they may be motivated to weaken or destroy it to make an ideological statement.”
At the same time, China could increase its hash power and have an increased influence on Bitcoin. China may also disrupt other mining pools outside its control. This would also significantly increase the portion of the hash power that belongs to China.
Bitmain, for example, is one of the largest mining companies in the world. Most of its operations are located in China. However, in the last months, it tried to move part of its plants to other countries such as Switzerland.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.