A recent study titled “The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin,” jointly researched by Princeton University and Florida International University researchers, suggests China’s mining scene has an overwhelming influence over Bitcoin, something that could invite network manipulation.
China, which the researchers refer to as the “most powerful adversary to Bitcoin,” has long been known as the country with the largest numbers of miners in the world and the home to Bitmain — the company responsible for mining roughly half the world’s bitcoins.
Bitcoin’s network is largely dependent on miners, who use a vast amount of computing power (hash rate) to verify transactions, find blocks to continue the network’s ledger and mint new bitcoin — and 74 percent of that computing power currently resides in China, according to the study.
Controlling 51 percent of the network’s hash rate opens the threat of a 51% attack, a scenario where miners can modify transactions on the ledger for their own economic gain.
Related Resource: BitCoinExchangeGuide.com, Oct 2018
Bitcoin represents the opposite view compared to Chinese centralization. While Bitcoin is a decentralized network, the Chinese government did everything as possible to control every market in the country as possible.
The study concludes that China is a threat to Bitcoin. However, if the government decides to start mining virtual currencies or attacking the network, other miners around the world could defend Bitcoin’s blockchain by adding more hashing power.