(Serious Question) Is Bitcoin Doomed to be Centralized by China?

[fiulpro]

China account for 65% of the hash rate for Bitcoins.
Most of the miners are concentrated in China but unfortunately the government wasn't that keen on keeping it up like that , In 2019 , they labelled Mining as *wasteful* , thus wanted to ban it .

Not only that let me quote this :-
"Cryptocurrency exchanges or trading platforms were effectively banned by regulation in September 2017 with 173 platforms closed down by July 2018. In early 2018 the People's Bank of China announced the State Administration of Foreign Exchange led by Pan Gongsheng would crack down on bitcoin mining."
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Now it's 2020 and we haven't heard anything from the government regarding the same. People are normally using the cryptocurrencies there and right now in a statement in 2020 the court stated that *Bitcoins is an asset protected by the law*.

Taking everything into account , the government is not keen on giving people that much independence therefore I do think they don't think highly of Bitcoins but, they continue to support Bitcoins since there are many miners out there who are dependent on Bitcoins for their normal expenses , plus Bitcoins do generate a good revenue for the government too .

I do not think they can dominate cryptocurrencies as a whole for sure . Sooner or later there will be problems regarding the same , people will get independence , they will get power there and government can never regulate the whole thing , it will be detrimental for them as a whole if they allow it on a much larger scale.
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Plus it  is the people who are controlling the hash-rate and they cannot just take away their farms as a whole *.* , Remember that cryptocurrencies is more or less an individual thing. Forcefully the government can never dominate Bitcoins .

They might try and invest in Bitcoins themselves if they want to but that doesn't sound right does it ?

[Sanugarid]

No, it's not doomed to be centralized in China.

Scenario 1:
The government will take over and continue to mine most bitcoin. They still cannot keep it to themselves because they have to cover mining operation related expenses. They have to sell/trade it somewhere and they cannot prevent anyone who bought from them to  send it anywhere else in the world.

Not necessarily! If a particular government wants to ruin bitcoin. They can take over all mining ops within their country and run it by paying out of their pocket. They won't necessarily have to sell those. The intention of the government is what matters, not money!

The last time I checked the mining processing power of China, it ranges from 60% to 70%, that means 60%-70% of newly mined bitcoin is born in China but with this data I don't think they can centralized the totality of bitcoin. However @Avikz is right, if the government wanted to do so then they will target these mining farms, put a tax on it and ruin the mining system. To be honest, they cannot do it anymore since there are only 2.5++ million of bitcoins left to be mined it isn't enough to control the bitcoin by any means.

Scenario 2:
The government will take over the mining farms and shut it down. Bitcoin will still thrive since anyone or any group can set up their own equipment and start mining bitcoin unless if they are in countries where it's forbidden by their law to mine.

They cannot shut it down easily especially when the registered place is just a home, they cannot get inside unless there is a warrant. What I think they will do to go after mining farms is that, they will raise the electricity rates so miners will get a hurting part with mining because the cheap electricity price in China is what makes their miners go crazy with bitcoin mining. Formulating a law that prohibits bitcoin mining is such a foolish reaction, there is no harm that any people could get in mining, so why would they?

[coiner-88]

No one really knows what the Chinese government will do in the end. We have no alternative. We have to keep faith in China for now. Currently the day is getting a little worse.
Hope everything goes well soon, But we also have to be ready for the future at all times. Honestly, no one can be trusted completely online, so it would be wise to be careful in advance.

[Gozie51]

I think that China might keep Bitcoin as an alternative,if their central bank coin project fails and if the US/China trade war continues,China might stop using US dollars as a reserve currency and replace them with gold,euro,or maybe Bitcoin(the last option is highly unlikely to happen,but who knows).

Stopping the use of dollar won't be an easy thing for only China to achieve despite their trade war with America. China also does international trade whose main exchange currency is the American dollar, this makes it difficult. However, if China has a strong agreement with other countries around them in Asia, such boycott can be visible.

[kezinaur14]

For me BTC will never be centralized. Yes mostly miners coming from Chinese but you expect they will have some sort of coupdetat due to current situation? Hash rate will decrease in due time I believe its not forever like this.

Dont compared the case of BCH, the owner of that project is beyond a typical crypto enthusiast, and he preferred BCH to be more like a centralized ecosystem. Roger Ver is a wise but coward for implementing a selfish 12% mining tax.

I like how you make the BCH comparison, I really don't think Roger Ver or faketoshi have the community's best interests in mind when making decisions, and even if they did, who's to say their successors will keep this? Centralization IS dangerous because it can be corrupted, it's not a matter of IF, rather, a matter of WHEN. And once it does it eventually fails. Bitcoin on the other hand is not built around centralization or with centralization in mind, I also don't think China will take over, I trust the rest of the world's miners will be able to fight back (sustancially) China's mining power.

[dothebeats]

Bitcoin is too low of a concern for the Chinese government that they'd simply let it exist and have the miners go at it and profit from it. From the looks of things, China is more interested in oil and other trade ventures that will net them hundreds of billions in profit rather than get a taste of bitcoin that really isn't worth much especially if they centralize it. Also, miners are from all over the world. and even though the largest concentration is in China, a split of the chain could happen rendering the Chinese chain to be useless and valueless.

Surely counter-measures on a takeover has already been implemented in the code by Satoshi, and such a thing could be prevented, though it will not be easy and might affect the confidence of people in bitcoin.

[pixie85]

Maybe it won't happen today, 6.25 BTC per block seems to still make the cut for many miners - but let's say pigs don't fly and BTC is still around 10k for the next halving and the next one as well. What prevents their government from attempting a hostile take over of the farms? (assuming they aren't all loyal to the party already)

What makes you think that 1 or 2 halvings from now China will still control over 50% of the mining power?

Even if the government took over all mines in their area by force it wouldn't mean the centralization of Bitcoin.

If more than 50% of mining is done bu one entity there's a risk of an attack on the network but such attack would be very expensive and would destabilize BTC making all your mining machies and coins mined by them almost worthless. If you gained coins by attacking the network you wouldn't be able to sell them with profit.

Taking over 51% of hashpower and attacking the network is like buying a small country to burn it to the ground with napalm.