Larsen stresses on the fact that China-based miners currently control 65% of the BTC hashrate and can have absolute control over the protocol in the future. Larsen requested U.S. regulators to work closely with the American blockchain and cryptocurrency companies.
By Bhushan Akolkar
Updated
3 mins read
Last week on August 21, Ripple co-founder Chris Larsen wrote an op-ed piece in the popular publication The Hill. In the piece, Larsen is speaking about the brewing tech war between the world’s two biggest economies – U.S. and China. Larsen reveals how the United States is losing grounds to China and thus its economic leadership.
Currently, the two countries are battling every odd with the upcoming 5G technology. Chinese companies have been making an aggressive push to grab a share of the U.S. telecom market. However, citing issues of national security, the United States is placing major roadblocks to let Chinese companies have any control over the U.S. citizens’ data. Reportedly, the U.S. security agencies claim that Chinese companies have been sharing data and information with the Chinese Community Party.
However, apart from the 5G and the AI battle, Ripple co-founder Chris Larsen thinks that the U.S. is neglecting the threats from China in the blockchain and digital currency space. Larsen said that although China has banned crypto transactions, it has largely subsidized the energy supply required by cryptocurrency miners. Larsen wrote:
“…at least 65 percent of cryptocurrency mining is concentrated in China, which means the Chinese government has the majority needed to wield control over those protocols and can effectively block or reverse transactions”.
Currently, China controls over 65% of the global BTC hashrate. However, a recent report from the University of Cambridge Centre for Alternative Finance (CCAF) explains that the overall hashrate “may not be fully representative”. In its report, the CCAF wrote their study “…represents only a little more than a third of the total hashrate” and all the data is provided by three Bitcoin mining pools that are all headquartered in China. The CCAF hopes to provide a more in-depth report in the future that can “…add data from major mining regions such as Siberia in Russia, Washington and New York States in the US, Québec and Alberta in Canada in upcoming reports”.
However, Larsen goes to argue that if China takes over the Bitcoin protocol “It’s not hard to imagine a dystopian future”. A U.S. defense payment to an ally could be blocked or reversed”, he added. Larsen added that the U.S. Regulators should have a close co-ordination with Silicon Valley companies operating in the blockchain space.
Currently, China has been leading the U.S. in terms of the total blockchain patents. On the other, China has also accelerated the development with its Digital Yuan. Experts believe that China’s central bank digital currency (CBDC) can challenge the dominance of the USD in the global financial market. While the U.S. has also started some developments when it comes to a Digital Dollar.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
