Changpeng “CZ” Zhao: China Wants to Control Mining

Above 60% of mining activity and block discovery is currently concentrated in China, and the government favors the activity.

The Chinese government deliberately favors Bitcoin (BTC) mining, and may actually want to centralize the activity and control the network, commented the CEO of Binance, Changpeng “CZ” Zhao.

https://twitter.com/cz_binance/status/1205178744287031296

Zhao’s statement was all-encompassing, essentially suggesting China may want to centralize Bitcoin mining. Currently, this is not far from achievable, as more than 60% of block discovery is happening with Chinese pools, based on local ASIC farms.

China also has one of the lowest breakeven prices for BTC, while other miners may need to sell at much higher BTC prices to break even. Miners are one of the essential parts of the network, and they are also notoriously difficult to control.

Recently, Zhao tweeted in defense of maximal decentralization, citing an earlier work on distributed networks.

https://twitter.com/cz_binance/status/1205145570949488641

Putting most Bitcoin miners under one jurisdiction, however, could have serious repercussions for the network. Currently, the Bitcoin network sees a multitude of nodes in the US, Europe, as well as Russia and Mainland China, with other nodes spread throughout the globe. But blocking some of the nodes is also a threat.

Poolin remains the most active pool, solving above 17% of blocks. F2Pool is also closer to the top, with BTC.Com and Antpool also highly active block producers. Together, the top four pools solve around 57% of blocks, and above 60% based on other reporting methods and depending on the day the data were gathered.

The current BTC hashrate is at 91 EH/s, getting closer to the usual levels near 100 EH/s. Mining is a highly fluctuating activity, and still depends on voluntary investment. Chinese miners have faced fears of a concerted crackdown, and separate farms have been closed for running risky hydroelectric operations on the path of flooding.

But overall, BTC mining has been one of the crypto-related operations that has been left to function freely, as a usage for excess hydroelectric power.

Reading now