China accounts for more than half of the world’s bitcoin mining capacity, but Jameson Loeb, co-founder and CTO of Casa, brushed aside concerns that Chinese miners pose a threat to bitcoin in a blog post on August 9.
While many people have raised concerns about the concentration of too much cannabis energy in China, Loop noted that even with a 51% attack on Bitcoin, attackers are limited in what they can actually do.
He explained that attackers cannot arbitrarily steal people’s bitcoins or change the consensus rules. They cannot undo valid transactions. The only thing they could do was double the use of bitcoins.
The best way for an attacker with 51% attacks to maximize profit is to pay through a cryptocurrency exchange into a “censorship-resistant cryptocurrency or stable currency”. However, this poses significant challenges in terms of withdrawal restrictions and knowledge of customer requirements between exchanges. It is also economically impractical for an attacker to dump a large chunk of bitcoin at once:
It is possible that the bitcoin value that you still hold after the attack has plummeted, and thus a successful major attack could actually hit you in the leg. Better not to miss the opportunity to access the target stock exchange. For example, after an IP address was leaked, a hacker recovered $ 25 million in stolen money. ”
Bitcoins rush to the rescue
Loop believes that it will be nearly impossible for a nation state to gain full control over mining, and that Bitcoin stakeholders will immediately take action against such a measure.
Even though the attack moves from a single mining target to an easier mining attack – 70% of China’s cannabis energy is coordinated across less than 10 mining ponds, it is very easy to change a mining pond for miners. This is also difficult to hide, as many independent companies post malicious alerts on social media.
“It’s hard to imagine a scenario in which a government official can quickly and secretly seize enough cannabis power to launch a continuous attack that will last more than a few hours.”
The reason hemp energy has been concentrated in China since 2015 is due to the fact that most of the chips for mining are produced in Asia, Loeb said. Most importantly, China also has an abundance of cheap energy and the political and economic stability to develop its mining infrastructure.
Loeb concluded that any large-scale attack on mining operations would have “limited effectiveness.” As Cointelegraph mentioned earlier, long-term competition for semiconductors and cheaper energy sources will continue to grow globally and China’s dominance in mining will not continue.