The week was unusually rich in apocalyptic forecasts. This time, it’s not that bitcoin could collapse or pose a threat to traditional finances. American researchers believe that cryptocurrency #1 can be destroyed by China.
The conclusions are repelled from, in general, a well-known fact about the proportion of Chinese mining pools in Bitcoin hashrates. Representatives of Princeton University and the Florida International University clarify that the share of seven large mining pools accounts for “more than 80% of mining”, with five of them located in China.
According to the authors ], the share of Chinese miners accounts for 74% of bitcoin hashrate, which is more than enough for an “attack of 51%”. At the same time, the report states that Chinese policy, including the Great Chinese Firewall, provides local miners with certain preferences, for example, they can choose which particular blocks to mine.
The authors argue that the Chinese miners use this opportunity to their advantage to mine the empty blocks, thereby promoting the miner in the queue and increasing the amount of remuneration. However, the speed of the entire network from mining empty blocks suffers.
The slowdown of the network is the smallest of the potential problems, which is fraught with a disproportionately large role of China in mining Bitcoin, scientists are encouraging. According to them, Chinese mining pools can attack the network in 19 different ways. One of them, known as the “Goldfinger Attack,” named after the antagonist from the 007 James Bond movie about the agent, who dreamed of blowing up the US gold reserve with a “dirty bomb”.
However, the theoretical possibility of such an attack does not provide an answer to the question of why Beijing might need it, and what is its benefit from the fact that Bitcoin will be destroyed.
Researchers believe that Bitcoin is an “ideological opposition” to communist China, therefore, the latter may be interested in “destroying or weakening it”. In their opinion, any damage to the security of Bitcoin can serve this purpose if it is sufficiently obvious to all.
There is another possible motive – in many countries, whose economies and currencies are rather weak, Bitcoin serves as a safe haven to save money from depreciation. China can attack Bitcoin in order to indirectly damage such countries, finally destabilizing their already weak economy.
Note that concerns about the huge role of China in Bitcoin mining are quite regular. Recall at least Brad Garlinghouse and his message “Bitcoin – Chinese money.” However, it should be taken into account that CEO Ripple is directly interested in promoting XRP as a “non-Chinese” and alternative Bitcoin cryptocurrency.
