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Bitcoin mining hash rate vulnerability to Chinese domination waning

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@julescape
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Bitcoin was designed by its inventor Satoshi Nakamoto to be safe from attack, based on its decentralized design. It’s supposed to be resistant to a 51% attack based on the fact that the bitcoin mining is happening on computers that are all over the world, in numerous locations simultaneously. As a result no one can hijack the system, since they would need to take over all the computers at once to do this. However, I still have a concern about the strength of the bitcoin blockchain when I see that more than half of the mining is happening in one country, namely China.

At present China is producing the vast majority of the hash rate, or bitcoin mining output, something like a massive 65% of it. That’s way more than half of it, and certainly more than the rest of the world combined. The closest second biggest mining capacity or hash rate, is coming out of USA, with a mere 7,2% of all bitcoin hash rate. And with China’s totalitarian political control, the CCP government can theoretically just decide one day to nationalize all the bitcoin mining farms and take control of the hash rate or blockchain if they desired. Then the numerous mining companies, of which there are three main ones, would have to hand over their collective power to a single entity, who would then have the majority of the hash rate and thus potentially could take over the entire blockchain. With that kind of power the Chinese government could dominate the blockchain and really compromise the system for everyone.

This is a real threat to the bitcoin blockchain but there is some consolation. Canadian and American corporations are now looking into increasing their bitcoin mining production with new mining technology investments. Bitcoin mining may be very cheap in China due to the hydroelectricity power available there, but Texas, Canada and other places are catching up, with their cheap power, and so one of the biggest mining farms will be in Texas in months to come. This will hopefully bring more of the hash rate to the west, or at least out of the hands and grasp of the Chinese government.

Ideally no government should be able to dominate the bitcoin hash rate and mining production at all. The beauty of bitcoin is its independence from control by any one entity. If some miners go offline in one area, then those in another area can take up the slack and carry on the blockchain. So the more miners the better, the more decentralized the blockchain becomes. And with electricity prices in China set to increase in Q3/4 annually, when the rainy season stops and hydropower is lessened, the hashrate may drop there overall and thus the balance should be restored a bit further. As global geopolitics becomes a concern now, since the lockdown and economic collapse, we need to keep an eye on China, who may become more belligerent in their move toward global hegemony and dominance. They cannot be allowed to launch a 51% attack on the bitcoin blockcahin. So I look forward to the day when the mining dominance is spread out more evenly around the planet, making it less vulnerable to any single state or private bad actor trying to take it over.

Bitcoin mining is not cheap, and if you’re thinking of getting rich as a miner, I would think twice, especially on the small scale. Mining rigs are pricey and becoming outdated every few years. Power to run it is pricey too, depending where you are. Big mining farms with many mining rigs are dominating the industry at present, so small retailers like us may do best to leave mining to the wealthy and simply buy bitcoin itself, with the view to “hodling” for the long term. This is not investment advice, but I personally will be buying if I have any extra fiat currency, and if price dips sharply any time in the near future. Sub-$10k bitcoin will be considered a very alluring investment when we look back from $100k in coming years.

Ref: https://coingape.com/bitcoin-mining-china-us-shift/