New study shows: China controls 74 percent of the world’s bitcoin mining

New study shows: China controls 74 percent of the world's bitcoin mining.

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Tim Haldorsson

tim.haldorsson@trijo.co

A new study shows that a clear majority of all bitcoin mining takes place in China. This creates opportunities for China's government to attack the bitcoin network through regulation.

In the bitcoin network, decisions are based on a majority of the votes in the network. A majority can be achieved by controlling 51 percent of all bitcoin mining.

A new study from Princeton University and Florida International University shows that bitcoin is controlled by Chinese mining. By controlling the internet and with the strict laws in China, the Chinese government could attack and affect the bitcoin network.

According to the study, 74 percent of the world’s bitcoin mining is currently controlled by various Chinese mining pools. There are 19 different ways a large group or a country like China could attack the bitcoin network.

51 percent attack

The most known way is a 51 percent attack where a group gets control of more than 50 percent of all bitcoin mining. Such an attack would allow the group to directly control much of what happens to the network. For example, the group could censor the network and shut out people.

What could motivate China to attack the network, according to the study, is that bitcoin’s decentralized style is an ideological opposition to China’s centralized government.

Attack on bitcoin to weaken other economies

Another reason that China would like to attack bitcoin may be that they want to weaken other economies. Countries such as Venezuela have, through a hyperinflation in the country, embraced the use of bitcoin. Through an attack on bitcoin, China could indirectly attack other countries economies.

However, conclusions from the study have not undergone any independent review and should, therefore, be taken with a grain of salt, the site The Next Web writes.

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