19 Ways to “Kill” Bitcoin: China Power!!
A scientific work published by researchers from Princeton University and Florida International University revealed that China has more than enough possibilities and motives to “kill” Bitcoin or at least to do considerable damage to the blockchain’s stability.
The paper entitled “The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin” elaborates extensively on the love/hate relationship between China and cryptocurrencies. While the government has maintained a restrictive policy against the use of cryptos, mining activity is highly popular in the country.
In fact, it is possible to conclude that anti-bitcoin China is responsible for the generation of most bitcoins, and this is an inherent danger according to the authors of the study.
51% Attack: The Most Popular of All Dangers
The paper details the ease with which a 51% attack could be carried out given that the Bitcoin mining ecosystem is “heavily centralized.” According to researchers “over 80 percent of Bitcoin mining is performed by six mining giants,” out of which five are located in China.
While there is no single pool with the capacity to carry out such an attack on its own, the fact that 74% of the combined mining power is located in China makes it plausible that this attack can be carried out if several pools decide or are forced to ally.
While it is possible that pools may not have any interest in attacking the Bitcoin network, the paper comments that because of ideological, political, economic or strategic reasons, the Chinese government could exert sufficient pressure on those responsible for these pools to carry out activities that harm the network:
“Because managers are responsible for assigning jobs related to mining and propagating completed blocks, they control the inputs and outputs of their miners, allowing Chinese authorities indirect control over the power of hash algorithm … If the Chinese government assumed control of domestic hash power, this property would grant them an advantage in selecting blocks for the ledger, which is important for some types of attacks.”