How much control do Chinese miners have over bitcoin?
If you deal in bitcoin regularly, you know China has arguably become bitcoin’s biggest fan, and its influence never goes unfelt. As the yuan devalues, the price of bitcoin is currently rising beyond $640, and it looks like this is merely the beginning of an oncoming bull run. At the same time, when something like the Bitfinex attack occurs, bitcoin can find itself up to its neck in sewage.
There’s no denying China has control. The big question is, how much? In particular, how much control is held by bitcoin miners?
According to reporter Nathaniel Popper, the mining sector originally made up only a small portion of bitcoin’s modern-day arena. With time, the sector continued to grow, and further mining centers were established. While the intention behind mining was to award bitcoin fairly, Popper feels it has since become problematic:
“The design of the bitcoin software gives decision-making power to the miners. These miners around the world have a sort of voting power over the bitcoin software and what bitcoin itself looks like.”
In the words of Popper, miners form blocks and rush to provide leeway for waves of transactions in the hopes that they’ll be given access to new bitcoins for their services. Presently, those with cheap electricity and cheap software are able to get to these bitcoins first, and both things are rampantly found in China’s bitcoin sector. Should the country retain its power, bitcoin mining in countries like the U.S. could suffer. Someone may decide that bitcoin mined in America can’t belong to any Chinese blocks. The work goes unaccepted, and U.S. miners and mining services are put on hold, or even worse, out of business.
While many are showing concern, Popper promotes a society where everyone is working together, and dominance is not held by a singular party:
“This was the idea of communal wisdom. It’s not at all clear that that software being developed by volunteers all around the world is going to able to adapt quickly enough to keep up with the existing power and all the resources that they have to put into this experiment.”