A few concerns about how China could manipulate Bitcoin
I was quite surprised about China's influence on the crypto market. When they announced to disallow ICOs, I didn't expect that to have any negative impact on the price of Bitcoin at all. Why would it? If anything I expected it to cause the money that was previously invested and spread over many more or less weird tokens to go into the major ones instead. Instead we saw a steep drop in price on all crypto currencies...
Then some days ago, they banned exchanges and okay, if you live in China and are given only a couple of days to liquidate all your coins, I can see how that would cause a lot of sales and a price drop... but about 40%?
Anyway, where are we now?
As it looks now they are closing small exchanges and keep only the ones controlled by the government, but disallow local trading, thus still allowing foreign money to flow into the country.
And what else could they do?
- They could confiscate all (foreign) assets on the remaining exchanges.
- They could force the miners to act together and sabotage the Bitcoin network in some way, e.g., let transaction rates drop.
- They could fork Bitcoin-Core and attack the network with an army of malicious nodes.
and maybe
- they could use the Great Firewall to cut of some part of the Blockchain, cause a fork and given that they have enough mining power to create a longer chain than the rest of the world, they could at some point reopen the firewall and cause all non-Chinese transactions to be discarded.
What do you think, we have to expect from the Chinese or from any other government in the future?
Cheers.
I think that this isn't just about China. IMO it's a whole lot of countries and organizations involved. China is just the messenger. Think about it.
I am not sure I understand what you are saying. Do you think the governments got together and have China launch this attack? I doubt, that is what happened, because having money flowing out of China is probably what most other countries like to see, while it is not so good for China. But sure, other actors (governments, banks) will have their go at cryptos, too, as soon as it has a notable effect on their business model.
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