The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin

By 30 octobre 2018 février 20th, 2019 No Comments

From Ben Kaiser, Mireya Jurado and Alex Ledger , 

Princeton University, Princeton, Florida International University, Miami

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Main points : 

  • As of June 2018, over 80% of Bitcoin mining is performed by six mining pools [8], and five of those six pools are managed by individuals or organizations located in China.
  • Five of those six pools are managed by individuals or organizations located in China.
  • 74% of the hash power on the Bitcoin network is in Chinese-managed mining pools.
    Pool miners cannot be directly controlled by China, but the managers are located within China and as such are subject to Chinese authorities.
  • If the Chinesegovernment assumed control of domestic hash power, this property would grant them an advantage in selecting blocks for the ledger, which is important for some types of attacks.

Four classes of attacks that China could perpetrate on Bitcoin :

  1. Censor specific users or miners. Goals: Ideological statement, law enforcement, foreign influence.
  2. Deanonymize users. Goals: Ideological statement, law enforcement.
  3. Weaken consensus / Destabilize Bitcoin. Goals: Ideological statement, foreign influence
  4. Disrupt competing mining operations. Goals: Increase control


Contributions: In this paper, we explore whether and how China threatens the security, stability, and viability of Bitcoin through its position in the Bitcoin ecosystem, political and economic control over domestic activity, and technical control over its domestic Internet infrastructure.

We find that China has motivations to threaten Bitcoin and has influenced it through domestic regulatory and technical measures. We also show that China has a number of mature capabilities for executing a variety of attacks. We enumerate and classify the attacks that China can execute and what goals that they would achieve.

Finally, we outline directions for future research, including additional dimensions of analysis and surveying potential mitigations to the threat China poses.

Organization: The paper is organized as follows. §2 summarizes the design and operation of Bitcoin. §3 briefly summarizes China’s relationship with Bitcoin and the technical and non-technical capabilities China could bring to bear on Bitcoin. §4 presents an analysis of how China’s Internet censorship limited throughput for Bitcoin as a whole, demonstrating a link between Chinese domestic policy and the global stability of Bitcoin. §5 systematizes the risk that China poses to the Bitcoin ecosystem. Finally, §6 concludes and outlines directions for future work.

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