Miner Centralization: BIG RISK For Bitcoin?? šŸ˜Ø

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ā° Time Stamps ā°

1:15 Why Centralisation is a Risk
3:40 Why it Has been Ignored
5:00 How Much is in China?
6:27 Could the Government Profit?
8:20 Could it be a Bargaining Chip?
10:00 Could they Control it for Pride?
12:00 Positive Trends Away
15:05 Impact of Halving
15:59 Conclusion

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ā›“ļø šŸ”— Helpful Links & Sources šŸ”— ā›“ļø

ā–ŗ Cambridge Mining Map: https://cbeci.org/mining_map
ā–ŗ 51% Attack Cost: https://www.crypto51.app/
ā–ŗ Property Law China: https://www.loc.gov/law/help/real-property-law/china.php
ā–ŗ Genesis Mining Review: https://www.genesis-mining.com/state-of-mining2020
ā–ŗ Coinshares Report: https://coinshares.com/research/bitcoin-mining-network-december-2019
ā–ŗ Barry Silbert on the Shift: https://www.reuters.com/article/us-crypto-currencies/crypto-asset-manager-sees-bitcoin-mining-shift-from-china-to-north-america-idUSKBN2052FW
ā–ŗ Bitmain in Texas: https://www.coindesk.com/why-bitmain-is-building-the-worlds-largest-bitcoin-mine-in-rural-texas

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šŸ¤” What is a Miner Attack? šŸ¤”

They can attack the network by double spending. So ominous is the threat of this attack that it is often colloquially called a “51% attack”.

It is the scenario where a miner is able to garner more than 50% of the network hashrate and double spend transactions. They can alter the state of the blockchain and reverse particular transactions that took place while they were under control of the network.

If someone knows that a malicious miner is able to alter the state of the Blockchain then it creates a crisis of confidence. Other miners to the network will either have to cease mining, or take the risk that they are confirming the invalid chain.

This risk has been discounted in the past given just how much it would cost to conduct an attack like this. People have also pointed to how impractical it is to marshal all of this hashpower and attack a network.

šŸ‡ØšŸ‡³ How Much Mining in China? šŸ‡ØšŸ‡³

Over 65% of the mining hashrate is emanating from China. Despite how large this may seem, its actually below the rate that we had earlier in the year when it was above 72%.

šŸ˜± What are the Risks? šŸ˜±

Things operate differently China than they do in most democracies. Property rights are a rather nebulas concept. Between local and central governments, companies often have very little certainty when it comes to regulatory guidelines.

The Chinese government could direct their miners to focus on attacking the Bitcoin blockchain. However, they are unlikely to do this given how impractical it would be to make any money from an attack of this sort. It is also really hard to do anything on the Bitcoin network without someone taking notice.

It is possible that the Chinese government could control Bitcoin in order to have leverage over western governments. It could be an immense feather in their cap if they control Bitcoin and stick it to Western governments. We have also seen how Chia has reacted to countries in the age of Covid and have attacked them.

šŸ¤·šŸ¼ā€ā™‚ļø Is it Likely? šŸ¤·šŸ¼ā€ā™‚ļø

China is unlikely to target Bitcoin as they have other bigger targets to go after. These include the likes of large Western Tech companies. Moreover, having control of Bitcoin will mean nothing to the western governments.

šŸ“‰ What the Trends Say šŸ“‰

It seems as if Chinese miners are trying to move away from the country. This is because of the lack of property rights and the risks that come from operating in China. There have already been a number of miners that have opened operations in places such as Texas, Iran, Canada etc.

These places also have attractive incentives for the miners to move. They have low energy costs and tax schemes. There are also a number of Bitcoin proponents who are seeing this shift take place and they are certain that the geopolitical landscape will push these miners away.

You also have to consider the impact that the halving has had on the profitability of mining Bitcoin. This has flushed many of the unprofitable miners out of the market and they could then be looking for more attractive regions to set up their mining rigs.

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šŸ“œ Disclaimer šŸ“œ

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.

#Bitcoin #BTC #mining #China #Halving #cryptocurrency #bitmain #control

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