As the crypto market has rebounded over the past few weeks, mainstream media coverage of the industry has increased. The trend continued recently when it was revealed that Brad Garlinghouse — CEO of decentralized ledger-centric fintech upstart Ripple Labs — had sat down with CNN for an interview to talk Bitcoin, XRP, and much more.
The televised conversation, according to a clip shared online, veered towards a controversial subject matter, with Garlinghouse and the host talking about the purported level of centralization with BTC mining.
Ripple CEO Draws Ire of Crypto Community
There’s no doubt that China is key in Bitcoin mining. The country is home to relatively cheap electricity in certain regions due to the heavy reliance on hydropower (and the subsequent existence of many dams), and some of the world’s biggest mining machine manufacturers are based there.
This, of course, has sparked some concerns about Bitcoin being too reliant on the Chinese market.
Garlinghouse touched on this discussion in his recent interview with CNN, according to a clip shared by a Twitter user.
In the clip, the Ripple CEO said that “China controls the Bitcoin blockchain,” before elaborating that there are “4 miners in China that represent 60% or more of total mining capacity for Bitcoin, and 80% of the mining capacity for both Bitcoin and Ethereum is based in China.”
Garlinghouse quickly drew the ire of the cryptocurrency community in uttering this, with some saying that the industry executive’s comment was factually incorrect.
Former eToro analyst and founder of QuantumEconomics Mati Greenspan said: “WTF Brad!? You know that’s not true!!” The analyst went on to point out that there are four mining pools known to be based in China, though added that mining pools do not equate to miners as there are individuals that comprise the pool.
WTF Brad!? You know that's not true!!
Are you so nervous that you feel the need to lie through your teeth??? https://t.co/G1mcfWORKx
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) February 17, 2020
The heat was raised by Tuur Demeester of Bitcoin alpha fund Adamant Capital. The long-term industry investor wrote in his own comment on the matter that it has been proven that Chinese miners don’t actually have control over the network as some have insinuated:
This is why studying Bitcoin’s history is so important. Chinese miners _tried and failed_ to control the Bitcoin blockchain in 2017 (B2X hard fork), but in reality never changed one iota of the code. Also, a mining pool =/= a miner, and only ~60% of total hashrate is in China.
Regardless, Some Say China’s Bitcoin Mining Dominance Still a Threat
While the fact of the matter is there isn’t as much China centralization in Bitcoin mining as Garlinghouse says there is, there remain concerns about the existence of a lot of hashing power in the country.
Bitcoin commentator and podcaster Eric Savics in October released an extensive thread on why “We must get Bitcoin mining out of China.”
“There is a high probability that Bitmain has backdoors into all the ASICs they produce,” Savics continued. While Savics didn’t say it explicitly, he largely implied that government actors working within China could threaten the decentralization of the network, and thus the immutability of Bitcoin transactions, if the nation continues on its path to control everything, evidenced by the “social credit” system.
Though, it seems that hashing power is slowly trickling out of China as crypto companies around the world set up operations in other parts of the world.
Per previous reports from Blockonomi, SBI Holdings — a financial services company group based in Tokyo, Japan that works closely with crypto-centric fintech upstart Ripple — and GMO Internet, have agreed to make use of a Texas-based mining facility that has a capacity of 1 gigawatt, three times larger than the facility claiming to be the world’s biggest Bitcoin mine.
The crypto crackdown in China, coupled with the recent coronavirus outbreak, may also help to decrease Bitcoin’s reliance on miners from China for security.