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China is not a Threat to Bitcoin but China may Lose Dominance over Mining Activity

China has the biggest share in Bitcoin mining than any other country. Some people consider it a threat to Bitcoin as maximum control of the Bitcoin network is established in one country only. Prominent cypherpunk Jameson Lopp says that China is not a threat to Bitcoin.

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China’s Dominance

Lopp explained in his blog post that in the future more mining chips will produce outside of China, and various countries will start offering cheap power, thus suitable for running mining machines. After this, China’s dominance in the industry may not last long. He stated:

“Over the very long term I expect we will see semiconducter foundries outside of Asia begin producing more mining chips and countries with even cheaper power sources will continue to become more industrialized, thus providing more competition when miners are seeking out new locations to set up shop. China’s mining dominance is unlikely to last.”

Can State Actor Attack Network?

It is a common belief that there is a lot of threat to Bitcoin due to the centralization of hashing power in one country. But Lopp said that a state actor cannot manipulate or take control of mining activity because independent actors are also present there.  Lopp added:

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“It’s hard to imagine a scenario in which a state actor would be able to quickly and covertly seize enough hashpower to perform an ongoing attack that lasts more than a few hours. A worst case scenario in which state actors did seize all of the physical equipment could result in China only mining empty blocks and orphaning other blocks that did contain transactions, essentially halting all transaction confirmations on the network. Then it would become a game of either patiently waiting for them to give up or coordinating a code change that would make their hashing machines worthless.”

To prevent the centralization of mining activity, the solution is to move towards decentralized such as mining pools where individuals have control.

Iran is the first country that designed a national-level plan to establish cryptocurrency mining farms in the country.

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Hassan Mehmood

Hassan is currently working as a news reporter for Tokenhell. He is a professional content writer with 2 years of experience. He has a degree in journalism.

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