Topic: (Serious Question) Is Bitcoin Doomed to be Centralized by China? (Read 272 times)

What makes you think that 1 or 2 halvings from now China will still control over 50% of the mining power?

Even if the government took over all mines in their area by force it wouldn't mean the centralization of Bitcoin.

If more than 50% of mining is done bu one entity there's a risk of an attack on the network but such attack would be very expensive and would destabilize BTC making all your mining machies and coins mined by them almost worthless. If you gained coins by attacking the network you wouldn't be able to sell them with profit.

Taking over 51% of hashpower and attacking the network is like buying a small country to burn it to the ground with napalm.

Bitcoin is too low of a concern for the Chinese government that they'd simply let it exist and have the miners go at it and profit from it. From the looks of things, China is more interested in oil and other trade ventures that will net them hundreds of billions in profit rather than get a taste of bitcoin that really isn't worth much especially if they centralize it. Also, miners are from all over the world. and even though the largest concentration is in China, a split of the chain could happen rendering the Chinese chain to be useless and valueless.

Surely counter-measures on a takeover has already been implemented in the code by Satoshi, and such a thing could be prevented, though it will not be easy and might affect the confidence of people in bitcoin.

I like how you make the BCH comparison, I really don't think Roger Ver or faketoshi have the community's best interests in mind when making decisions, and even if they did, who's to say their successors will keep this? Centralization IS dangerous because it can be corrupted, it's not a matter of IF, rather, a matter of WHEN. And once it does it eventually fails. Bitcoin on the other hand is not built around centralization or with centralization in mind, I also don't think China will take over, I trust the rest of the world's miners will be able to fight back (sustancially) China's mining power.

Stopping the use of dollar won't be an easy thing for only China to achieve despite their trade war with America. China also does international trade whose main exchange currency is the American dollar, this makes it difficult. However, if China has a strong agreement with other countries around them in Asia, such boycott can be visible.

No one really knows what the Chinese government will do in the end. We have no alternative. We have to keep faith in China for now. Currently the day is getting a little worse.
Hope everything goes well soon, But we also have to be ready for the future at all times. Honestly, no one can be trusted completely online, so it would be wise to be careful in advance.

The last time I checked the mining processing power of China, it ranges from 60% to 70%, that means 60%-70% of newly mined bitcoin is born in China but with this data I don't think they can centralized the totality of bitcoin. However @Avikz is right, if the government wanted to do so then they will target these mining farms, put a tax on it and ruin the mining system. To be honest, they cannot do it anymore since there are only 2.5++ million of bitcoins left to be mined it isn't enough to control the bitcoin by any means.


They cannot shut it down easily especially when the registered place is just a home, they cannot get inside unless there is a warrant. What I think they will do to go after mining farms is that, they will raise the electricity rates so miners will get a hurting part with mining because the cheap electricity price in China is what makes their miners go crazy with bitcoin mining. Formulating a law that prohibits bitcoin mining is such a foolish reaction, there is no harm that any people could get in mining, so why would they?

China account for 65% of the hash rate for Bitcoins.
Most of the miners are concentrated in China but unfortunately the government wasn't that keen on keeping it up like that , In 2019 , they labelled Mining as *wasteful* , thus wanted to ban it .

Not only that let me quote this :-
"Cryptocurrency exchanges or trading platforms were effectively banned by regulation in September 2017 with 173 platforms closed down by July 2018. In early 2018 the People's Bank of China announced the State Administration of Foreign Exchange led by Pan Gongsheng would crack down on bitcoin mining."
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Now it's 2020 and we haven't heard anything from the government regarding the same. People are normally using the cryptocurrencies there and right now in a statement in 2020 the court stated that *Bitcoins is an asset protected by the law*.

Taking everything into account , the government is not keen on giving people that much independence therefore I do think they don't think highly of Bitcoins but, they continue to support Bitcoins since there are many miners out there who are dependent on Bitcoins for their normal expenses , plus Bitcoins do generate a good revenue for the government too .

I do not think they can dominate cryptocurrencies as a whole for sure . Sooner or later there will be problems regarding the same , people will get independence , they will get power there and government can never regulate the whole thing , it will be detrimental for them as a whole if they allow it on a much larger scale.
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Plus it  is the people who are controlling the hash-rate and they cannot just take away their farms as a whole *.* , Remember that cryptocurrencies is more or less an individual thing. Forcefully the government can never dominate Bitcoins .

They might try and invest in Bitcoins themselves if they want to but that doesn't sound right does it ?

the problem is that what you see as "sources" are mostly poorly researched and written articles by news sites or individuals that seek to be heard.

there is a difference between a mining farm and a mining pool. there are Chinese owned mining pools that have servers in multiple places and the miners connecting to these pools (multiple) count for as much hashrate as 65%.
then there are mining farms that are among those miners that connect to those pools that could only have 1% of hashrate or less.

taking over a pool means miners abandon that pool and connect to another server.
taking over a mining farm means taking over a small percentage of hashrate.

apart from the difference in algorithms, another problem was that steem was already centralized which is why he could do what he did. in comparison bitcoin (both hashrate and nodes) are decentralized and distributed all over the world. so there is no single point of attack, for example as i said above you'll have to take over thousands of miners to gain a meaningful amount of hashrate that could be used for an attack. and if such actions were noticed a hard fork could prevent such attacks.

of course a better "prevention" mechanism is always more decentralization meaning more distributed hashrate, more number of mining pools coming from different parts of the world, more bitcoin full nodes coming from all parts of the world.

It would make attacking the network less costly since it would take less to generate blocks faster than the rest in the network. However, you have to consider the resources needed for a 51% attack. Rationally, it still wouldn't take place since the amount of hashrate you'll still have to gather is a pretty significant amount. You can't use money to buy that much hashrate. Blocks would be mined at a longer interval until at least the next difficulty adjustment.
The big farms located in the other countries would take over. It's just that China will no longer have the largest concentration of hashrate.

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Crypto mining is probably one of the bigger sources of revenue for some of the provenience and the larger government. Spending billions to attack a crypto and wasting all the ASICs that they have won't do any good and the community will just fork the coin and shift elsewhere. Its just not to their best interest.

Nobody knows what the Chinese government will do after China launches their central bank digital currency.
Perhaps the government will ban all the other cryptocurrencies and crypto mining in China.
I think that China might keep Bitcoin as an alternative,if their central bank coin project fails and if the US/China trade war continues,China might stop using US dollars as a reserve currency and replace them with gold,euro,or maybe Bitcoin(the last option is highly unlikely to happen,but who knows).

This is also my concern, not how many coins they can take from the miners but what can they do with all that hash power. Maybe they won't even want to take over bitcoin network but instead do it to undermine it, in the case that they want to their blockchain/crypto take over bitcoin spot.

A tad bit too late imo. Firstly, even if China does take hold of all miners and take all the coins they mine, it's less than 15% of the coins of the total supply now. Even if they do hold it for long until the time that supply is thinned out to the point that they'd be the majority, it'd take too long. Not to mention that mining takes up a significant amount of money to perform, even the fact that they'd hold that much amount of Bitcoin for an unknown number of years is already destroying their economy. There isn't even any guarantee that they'd receive the entirety of that less than 15% BTC that hasn't been mined yet.

I'd rather be concerned about how China could potentially perform a 51% attack on the Bitcoin scheme. I'd rather them continue hating Bitcoin and eventually shutdown all their miners in the country and let the community take over. I just wish their notion of hating means leaving it alone and not taking over it.

But in this case, with the hash rate reduced so much, it wouldn't be a threat for btc network integrity, security and validation times? Maybe I'm thinking in the worst-case scenario but I genuinely want to know, besides how something like this can affect the price, wouldn't make it vulnerable to something like a 51% attack?

What makes Bitcoin different from altcoins is that it has a large network of nodes that independently validate transactions, and users are encouraged to run full nodes if possible. And Proof of Work makes it seriously expensive to attack Bitcoin, so even if China takes over the farms, they'll have to pay out of their own pockets to sustain this attack.

Altcoins on the other hand have inherently centralized design. PoS means that buying majority or even less than majority of coins is enough to mine as you please, and masternodes and other similar schemes mean that regular users aren't peers of the network, they are clients who rely on servers. This is why coins like Steem can be taken over, though even in that case community tries to fight back by forking the project.

Not necessarily! If a particular government wants to ruin bitcoin. They can take over all mining ops within their country and run it by paying out of their pocket. They won't necessarily have to sell those. The intention of the government is what matters, not money!


No contradiction here! This way only a particular country will come out of the network and not others. Instead, once 60% of Chinese hashes are out of the market, the difficulty will decrease drastically which will create more opportunities for old miners to come back to the network.

All resources are finite. Economics 101.

Plus watch the video in the Twitter link I posted for you, and read more about how Bitcoin works, and why full nodes are important. I believe you'll find your answer.

I agree in the sense that is not a "now" concern - maybe not even for the next halving but for sure for the one after that because if the price hasn't scaled and block production is at 1.XX BTC per block, it will be hard to justify mining for a lot of people except for those with infinite resources, like the Chinese government.

I'm just thinking that we should start doing some pre-planning and even future-proofing bitcoin for this scenario, the tech is out there, at least the basics, its just a matter of reaching a bitcoin core consensus for new security features.

OP, bad-actors WILL be THROWN OUT, https://twitter.com/bitcoinmagazine/status/1197161029832265729

Listen to it over and over 100 times, and let it sink in. OK? Nation-states' "hostile" miners would be better rewarded if they were honest.

I would say that this is a valid and major concern but as of now we don't see it happening. The Chinese government can be unpredictable many times and they have the tendency to be secretive so essentially it would be hard to read whatever they are thinking and this can be the big reason why many are concern whether one day Bitcoin can be controlled by the government for their own purposes. We should be vigilant, of course, but not react like it is already the end of the world.

It´s not Bitcoin who is doomed to be centralized but to be put aside in favor of a CBDC. WeChat just invested 70M USD into fintech incl. blockchain and AI. They could simply block every app that allows Bitcoin and reduce the legal use to a Digital Yuan. China is already beyond cashless, I mean you can donate to a beggar with a QR code!