More of a general question as I've recently gotten into investing in cryptocurrencies. I really love the vision for the future this technology provides, the freedom, ease of use, lack of middlemen, etc.
I am continuing to do my research and came across a lively debate: https://www.youtube.com/watch?v=zA5jnK4v884
Now to me one of the strongest points brought up by the 'opposition' is the idea that the majority of the hash rate could belong to a hostile government, who could then use that to control the network. In other words, is the following possible?
- 'China' (replace with whatever centralized boogeyman you'd like) has over half of the world's hash power in their country.
- This state actor then confiscates/buys up all the hardware of everyone in their country that is mining BTC.
- Then with the majority of the hash power, they can mine 'empty blocks' to clog up the system, or, as I understand it, perform a '51% attack' whereby they can just record everyone sending all their BTC to their account, and then mining these blocks to make it so.
Is this theoretically possible in today's world? What are the practical limitations of such a thing happening?
To me this is the scariest 'Black Swan' event because I don't doubt that a country like China could confiscate everyone's mining equipment, and if that means they'll have more than half of all the mining power/hash rate in the world... Well that could be the end, right?
Let me know what you think and help me understand these possibilities :)