The former CEO of Ripple Chris Larsen considers that China could control the majority of the Bitcoin (BTC) mining power. In a recent op-ed, Mr. Larsen explained that most of the Bitcoin mining operations are concentrated in China, which could lead to the total control of the network.
Could China Control Bitcoin’s Mining Power?
China could certainly pose a major threat to the Bitcoin (BTC) network in the future. Chris Larsen considers that as most of the Bitcoin miners are concentrated in China, the government would potentially have the possibility to block or reverse transactions.
Currently, the Asian country hosts most of the mining operations needed for the Bitcoin network to be secure. The government has been subsidizing the energy needed for the mining farms to properly compete against other countries.
It is worth mentioning that around 65% of the global Bitcoin hashrate is currently located in China. The larger the hashrate in the network, the larger the security of the transactions. However, if there is a group of companies that control most of the hashrate of the network, this could lead to a reversal of the transactions that take place on the Bitcoin’s blockchain.
Indeed, China could exert its influence in the market in order to block specific addresses, provide clear information about users and eventually make the network more unstable.
Despite the negative sentiment of Mr. Larsen, China may not be able to control the hash rate of the Bitcoin network. The negative effects of reversing transactions or blocking some transfers that take place on the blockchain are larger than the positive effects of controlling the network.
Furthermore, there are many miners all over the world that are ready to turn on their machines in case a more decentralized network is needed to make it even more secure. It may take a long time before China is able to size the mining power of the firms currently operating on its territory, which could also warn other mining farms around the world and lead to an increase in the hashrate.
Nevertheless, it is clear that China has an advantage over other countries in terms of having most of the largest mining firms operating in the country.
The larger the price of Bitcoin the larger the incentive for new miners to enter the market. This could lead to an increase in other hubs all over the world where users will be able to continue with the decentralization of the mining operations.