Topic: Is China still dominating the mining industry (Read 198 times)

There is no doubt China is trying to dominate the crypto world. It has the intention to launch its own cryptocurrency and it is true that China is giving the competition to the global community in the mining sector.

The very purpose of using bitcoin is that they are completely trustless but if Bitmain tends to increase their hashrate higher than 51%, it breaks the purpose of why bitcoin was created. Even today people believe in Ghash and Bitmain that they won't do anything bad to the network if such a situation happens in some near future.

It's highly impossible for China as a country to completely manipulate the market since if someone needs to manipulate or take control of the bitcoin system (as like CZ thought of doing that during the Binance hack) a particular mining company like Bitmain alone should have 51% of the network hashrate. Ghash was a mining company where majority of the miners joined hands, but sooner Ghash instructed some miners to look for a different pool thereby making the mining industry again trustless.

This is quite true. Theoretically a 51% attack is possible, but to practically execute such an attack I think we need atleast 60-65% of the hashrate as 51% of the hashrate is constantly needed by the miners to create a chain longer than the current original chain. I had been running a full node last year just for learning purposes and deleted the blockchain later and converted it to a reg-test mode to regain space in my PC. During that time, I have once seen REORGANIZE keyword being shown in debug.log but that actually means a chain reorganization has taken place and the client shifted to a longer chain.

If someone has less than 51% hashes and still trying to broadcast false transactions, their IP address would be permanently blacklisted (caught) by the node as TheUltraElite said. There is a code written in the client for blacklisting of the nodes if they try to broadcast or accept false transactions or blocks.


Tx fees and mining are completely unrelated to each other. Fees increases only when there is large number of pending transactions in the mempool whereas mining doesn't gets slowed down or gets faster.


Let us consider your scenario that Bitmain or China completely stops their mining operation (which is highly unlikely), at that moment the mining will depend upon other mining companies which will significantly take more time to solve the 2016 blocks. Difficulty adjusts every 2016 blocks and if these blocks take more time to get solved, difficulty reduces thereby making miners to find new block under the current target more easily. By this way new miners would jump in the network and help in mining btc. This might make the China/Bitmain worthless again.

Perfectly right. A little more additions to the post.

A quits and thus making B and C mining those 2016 blocks. It takes a lot more time than A,B and C mining cumulatively. Hence the difficulty drops and when B and C solve the block they are rewarded. When B leaves, C mines the blocks alone and it takes even more time than B+C cumulatively to mine 2016 blocks. Difficulty gets reduced to suit C's hashing power and thereby C becomes the sole owner of that prize.

A group of miners do not control the network. They mine the coins, but cannot control the network fees because that is dependent on the global miners whose cumulative hashpower determines the difficulty and proportional subsidy of the block mined by them.


Say we have three miners A, B and C. Now they are mining at similar hashpower and now A quits. So the proportional prize for B and C will increase. This will incentivize them to remain on the network and not stop mining. Similarly if B quits, C is getting the lions share without having a high difficulty since the total number of miners are now low and the proportional block subsidy is completely his.

Thus the event of one miner or one group of miners leaving the network would mean that the hashpower given by the other miners would fetch them a bigger reward. This was how mining has been incentivized so that people dont leave the mining process.

Though I am not an expert in these things. Maybe @heisenberg_hunter can clear some more points.

I must have made myself more clear. When I said potential risk to the bitcoin network I actually meant that the bitcoin fees might get increased whenever China wanted. If they control 66% of global hashrate then they can stop all the mining operation whenever they want which will make the network congested and thus the bitcoin transaction fees would be increased. Am I missing something here ?

The government there is allowing companies like Bitmain to proliferate their business. Unlike India where they are trying to curb crypto-related projects. Things may soon change too.

Not at all. I dont know where you got this idea from, because this is a common FUD point made by nocoiners and altcoin shills to scare bitcoin users.

The mining system is protected because you cannot expect all the miners to unite in order to break the chain. Those who try to break the consensus will be caught. This is something like the balance between yin-yang or good and bad.

Bitmain is planning to come up with the largest mining farm in Texas, so what do we call them, the China's biggest mining farm in Texas  , there are many private investors starting their mining farm in Norway or any places where it is feasible to get profit.

I am against monopoly and i am not happy to see a single investor dominating the entire mining space, i would like to see many investors competing with each other and if a single individual or a company dominate the entire network then it is a security risk.

The question here is about the dominance of China in mining and not about the ban of crypto in China.
Besides that, we don't know if China will actually launch it's own crypto and so never trust the rumors in the market until they actually become true.

China controls more than 66% of global hashrate. It's not about the 51% attack but about how easy it would be for China to manipulate the market.

I think China is not banning crypto and mining the first time they are done may time in past maybe this time also going to happen the same and china is the first county to manufacturing the bitcoin and other crypto mining equipment and dominating the 70% of the mining industry.
but why is china planning to launch its own cryptocurrency if going to ban?

We exactly don't know how much mining dominance they have and its proven that 51% attack will be more expensive than its profits so I don't think having more dominance at particular country will not affect anything until all the miners were owned by single person.

We all know that China has been a huge contributor in crypto until their government completely prohibited the use of crypto and banned mining.
Despite that, there were still some underground users and mining farms who have been actively mining bitcoins.
Now a study shows that China is dominating the global bitcoin hashrate by 66% .
Much of it might come from Bitmain which actually stands as a monopoly in China.
Don't you guys think that having such a huge dominance is a potential risk to the bitcoin network ?
Drop your opinions below.

Source : https://cointelegraph.com/news/study-chinas-btc-miners-control-66-of-global-hash-rate