Source: https://steemit.com/bitcoin/@dantheman/who-really-controls-bitcoin

This article suggests that governments and electricity companies have the power to control bitcoin. Any truth in this article?

I've attempted to post this question twice on reddit bitcoin and reddit btc, but my question keeps disappearing.

  • Your question keeps disappearing because it's off-topic where you post it.
    – UTF-8
    Commented Dec 13, 2016 at 14:09
  • 2
    @UTF-8: Do you mean to say that it is off-topic here as well? If yes, could you elaborate why this would be off-topic? It seems to me that this is trying to get educated opinions on a Bitcoin network vulnerability. I'd say this falls into the Good Subjective spectrum, if answerers keep in mind to discuss the "why" and "how".
    – Murch
    Commented Dec 13, 2016 at 23:51

3 Answers 3


As we've answered earlier today the description of what happens when 90% of the hashpower is lost is approximately accurate, although somewhat exaggerated:

"A 90% loss will create 2 hour block intervals and take a year to resolve."

Actually, it would be 100 minute blocks and would take less than half a year even assuming that no new hashrate were added and the event were directly after a difficulty reset.

Now, luckily, no single government can intervene with 90% of the hashpower. I've seen estimates that about 60% of the hashpower is in China, which if taken out at once would be a major blow, but would only delay the network's rebalance for three weeks (five instead of two weeks for the difficulty period).

Besides, if really 90% of the hashpower were taken out at once with no chance of recovery, a lot would speak for an emergency hardfork to a new hashing algorithm, both to resolve the difficulty hike as well as evading a potential majority attack from the government(s) that took control of the 90% hashpower. While the article alludes that

"forking is impossible without an effective voting / governance system for Bitcoin"

It seems to me that in the face of such an external attack a fork with the single purpose of changing the hashing algorithm would be achievable.

Finally, the article states:

"Only Delegated Proof of Stake (DPOS) has the ability to remain independent of direct government control due to the much lower resource requirements for operating a node."

Which feels like an oversimplification to me. PoS is widely considered as being less secure than PoW among experts, but even so one can say certainly that it makes different security trade-offs. E.g. it is susceptible to one or a few parties holding a majority of the system's tokens, and since POS deployment often is combined with a large pre-mine, it is not hard to be concerned about the initial distribution. One must also consider that the author Daniel "dantheman" Larimer is the founder of Steemit, so it would make sense to get another opinion on the trade-offs between PoW and DPOS…


This is a bad article.

While it may be true that Bitcoin is difficult to change, it is much easier to shut down.

This is true! While full clients will not accept invalid blocks, nothing guarantees that there will be valid blocks to confirm transactions.

The largest mining firms has worked out special arrangements with the chinese government which controls the power company.

This, on the other hand, is pure speculation. It's common for power companies to give a reduced rate for bulk purchases, or for the privilege to ask the power user to shut their machinery off during peak hours. That's not the same thing as a subsidy, and the author has presented no evidence of such a subsidy.

In almost all cases, bitcoin is mined by electricity produced by government regulated and/or nationalized power plants.

There's a problem with this argument, which is that a regulated power company is not the same thing as a government-controlled power company. (Particularly when many of the regulations say "Don't cut off electricity to customers who have paid their bill.")

What Happens when Power is Cut

This doesn't make very much sense as an attack vector. In order to cut someone's power, you must know where they are connected to your electrical network. (Unless you're imagining that the power company is shutting off power to every customer.) If someone knows where you're connected to the electrical network, they know your physical location, so they can just walk in and take your mining equipment. No secret subsidies or complicated planning required.

The author's thesis isn't supported by any evidence or common sense. It doesn't explain why all these governments would cooperate to destroy Bitcoin, except for some general hatred of freedom. Nor does he consider the logical countermove available to the Bitcoin community - a hardfork to temporarily drop difficulty by a factor of ten, which would bring Bitcoin back to equilibrium within weeks.


Not exactly the same topic but still relevant and perhaps a touch more philosophical.

Bitcoin was suppose to be decentralized. But for miners it is not feasible to really run a solo operation anymore and many opt into mining pools instead for predictable income. Now two mining pools control more than 50% of the the mining power that in theory means that those two pools could change the immutability of the ledger.

There are only a few domininant mining pools.

So as a consequence mining pools are becoming the new central banks since they need to act benevolent and in the best interest of the network for it to succeed. But this is contrary to the whole goal of Bitcoin.

Why is it that even when we try and create a system that is decentralized, centralization and concentration of power eventually emerges? Is this in our nature and what does that mean for the ideals of crypto currencies?

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