[2021-04-21] Governments can stop Bitcoin by shutting down mining, says Electric

[Woodie]

Governments can stop Bitcoin by shutting down mining, says Electric Capital exec
"If the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly," said Curtis Spencer.

Electric Capital co-founder and partner Curtis Spencer implied that the Bitcoin network may owe its continued existence to the grace of world governments.

In a panel at the Collision web summit on Tuesday, Spencer said lawmakers are the ones giving Bitcoin (BTC) a chance to grow by not imposing harsher restrictions on mining operations in their respective countries. The Electric Capital executive was speaking on the state of investing in cryptocurrency in 2021, alongside Michael Jordan of Galaxy Digital, Kartik Talwar of A Capital, Ash Egan of Accomplice, Tara Tan of IDEO CoLab Ventures and moderator Min Teo of Consensys.

“Could Bitcoin really be stopped by government?” asked Spencer. “I actually think maybe it could be. If you think about the cost of attacking the network, it’s not something that nation-states couldn’t do.”

He added:

“Look at what happened in Xinjiang. You could shut down the Bitcoin mining network actually pretty quickly, especially if the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly. I think the fact that [Bitcoin is] still here means governments are supportive.”

Spencer was referring to recent events in the Xinjiang region of China, which represents roughly 25% of Bitcoin’s global hash rate. Crypto market analyst Willy Woo claimed that BTC’s crash to the $50,000s over the weekend was a result of a power outage in the area, subsequently dropping the hash rate from 172 terahashes per second to 154 million TH/s.

The power outages were reportedly initiated to facilitate safety inspections in the region, implying that there’s seemingly nothing stopping the Chinese government from intentionally dropping the hash rate. Though fellow panelist Jordan argued that lawmakers were starting to shift their positions on crypto, he was seemingly referring to authorities not trying to shut down the network on the internet rather than attacking miners.

“You hear regulators speaking with a newly sophisticated term, which is that ‘You can’t ban Bitcoin,’” said Jordan. “You can basically cut yourself out of innovation and participation and economic growth that these systems precipitate for other citizens, but you can’t actually ban it.”

At the moment, the regulatory environment in the United States seems to be favoring crypto miners rather than pulling the plug on them — though some farms in Texas did have to restrict operations during a massive winter storm this year. Kentucky lawmakers also recently passed two bills that would give tax breaks to crypto miners in an effort to attract new firms to the state.

https://cointelegraph.com/news/governments-can-stop-bitcoin-by-shutting-down-mining-says-electric-capital-exec

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[odolvlobo]

More crap from Cointelegraph...

"If the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly," said Curtis Spencer.

Bitcoin can function without any problems if 80% - 90% of the hash rate is turned off. In 2018, the hash rate was 80% - 90% lower than it is now, and Bitcoin seemed to be doing well.

[cr1776]

Governments can stop Bitcoin by shutting down mining, says Electric Capital exec
"If the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly," said Curtis Spencer.
...

And so?  Blocks would be slow for a while and then retarget.  Other places would step in. Prices for mining equipment would spike, old equipment might get spun up (certainly not CPU or GPUs).

And if the US and Kazakstan "stopped all the miners", what would happen to the mining equipment?  Would they also seize (steal) the equipment? Would they destroy it?  In the US that would have big issues, most likely requiring payment.  If they didn't seize the equipment the miners would sell them to someone else, somewhere else (or move them themselves) and they'd be back online reasonably quickly.  If all those miners got paid by the US government, do you think they'd burn the money or go somewhere else and buy more equipment and start mining again?

Even if 99% of mining equipment worldwide was shut down, destroyed and had no payments made, at worst it would take quite a while to retarget.  More likely, there would be a quick update to Bitcoin Core to allow a faster retargeting period and after some short period of disruption, things would continue on as if nothing had happened. Perhaps even with CPUs or GPUs if 99.9999999999999999999% was shut down.  How would anyone stop that except by banning computers or networks?

This is a bunch of garbage from some newbie who hasn't thought through all the issues.  Or perhaps he has and just (a) doesn't understand them or (b) wants to cause angst.

[Slow death]

years ago it was a theory that without China this market would not survive, now it comes with this "big news". whenever there is a problem people always get some solution, and all governments would not shutting down mining at the same time, there will always be some government that will support mining, moreover the technology does not stop to evolve, with time it will find a very solution better to save electricity consumption that mining consumes

[bbc.reporter]

More crap from Cointelegraph...

"If the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly," said Curtis Spencer.

Bitcoin can function without any problems if 80% - 90% of the hash rate is turned off. In 2018, the hash rate was 80% - 90% lower than it is now, and Bitcoin seemed to be doing well.

Agreed. It will only slow down block confirmation until mining difficulty has lowered for miners and it will be back to 10 minutes per block again. This will certainly be a cause for fear and a big dump on the market, however.

[dansus021]

Governments again why they just simple take the cryptocurrency  china xinjiang only made 33% bitcoin hashrate down

but in my opinion Governments can stop the bitcoin because there still other coin and maybe the bitcoin core dev trying to figure it out before its happen 

[Vishnu.Reang]

They are wrong. There are more than 250 countries and autonomous territories in the world and there is zero chance that all of them would crackdown on Bitcoin mining simultaneously. OK.. let's take the unlikely scenario of that happening. But that doesn't mean that all of the miners would just shut down their shop and quit. There will be some who would continue mining cryptocurrency, albeit anonymously. I don't think that the governments have the resources to track down and prosecute small scale miners.

[Carlton Banks]

Bitcoin can function without any problems if 80% - 90% of the hash rate is turned off.

And so?  Blocks would be slow for a while and then retarget.  Other places would step in. Prices for mining equipment would spike, old equipment might get spun up (certainly not CPU or GPUs).

not only those things, but also:  transactions on off-chain networks would continue as if nothing had happened. Looking at the logs on my c-lightning node, it seems that's exactly what's been happening throughout this "shutdown"

[cr1776]

Bitcoin can function without any problems if 80% - 90% of the hash rate is turned off.

And so?  Blocks would be slow for a while and then retarget.  Other places would step in. Prices for mining equipment would spike, old equipment might get spun up (certainly not CPU or GPUs).

not only those things, but also:  transactions on off-chain networks would continue as if nothing had happened. Looking at the logs on my c-lightning node, it seems that's exactly what's been happening throughout this "shutdown"

Excellent point.  This was just a non-issue that someone decided to publish and the author of the article didn't or couldn't ask penetrating questions about the obvious flaws in it.

[Streets 2.0]

Obviously, such a scenario looks too weird. What's the point in losing your market share? What is the point of giving other countries the advantages and privileges that you have? There are and will be restrictions - but a complete ban is a shot in the foot. I cannot think of a reason that would stimulate the governments of these countries to take such a step. If you can imagine such a thing - can you share what it could be?

[hv_]

Right, but also fiat converters and exchanges, wallet providers

Liberty Reserve was closed as well

[Theb]

Since when did the United States and Kazakhstan hold 90% of the total hash rate of Bitcoin mining? As far as I know they were even nowhere near what China is producing so this news is very misleading. However if you asked me if China will do this thing I believe that it still won't "stop" Bitcoin as basing it from the past news Chinese miners have their intentions to move out from China any time this happen to their country and I think other countries will welcome Chinese miners to their country. This will be a huge loss for the country who will be considering a ban as they will be losing a growing industry instead of taking advantage of it.

[Betwrong]

Since when did the United States and Kazakhstan hold 90% of the total hash rate of Bitcoin mining? As far as I know they were even nowhere near what China is producing so this news is very misleading. However if you asked me if China will do this thing I believe that it still won't "stop" Bitcoin as basing it from the past news Chinese miners have their intentions to move out from China any time this happen to their country and I think other countries will welcome Chinese miners to their country. This will be a huge loss for the country who will be considering a ban as they will be losing a growing industry instead of taking advantage of it.

I'm curious about that too. Maybe it's some latest data we are not aware about?

According to statista.com, the situation looked like this one year ago:

[Karartma1]

Bitcoin can function without any problems if 80% - 90% of the hash rate is turned off.

And so?  Blocks would be slow for a while and then retarget.  Other places would step in. Prices for mining equipment would spike, old equipment might get spun up (certainly not CPU or GPUs).

not only those things, but also:  transactions on off-chain networks would continue as if nothing had happened. Looking at the logs on my c-lightning node, it seems that's exactly what's been happening throughout this "shutdown"

Excellent point.  This was just a non-issue that someone decided to publish and the author of the article didn't or couldn't ask penetrating questions about the obvious flaws in it.

They never reach a lowest point, never. These guys are always great at achieving the worst possible journalistic point of view.
Not only they clearly don't understand shit of what they are talking about but they also spread fud around.
God, I hate them

[Kong Hey Pakboy]

Only time that I think that bitcoin will be stopped by the government is if they disable electricity altogether which is impossible since a lot of people will die in the next 24 hours without electricity and we will basically go back to Stone age when that happens so I call BS on this claim because as long as there is electricity, miners will find a way to  do their thing albeit they have to be more crafty and careful.

[willoweb]

The first thing that comes to mind in this scenario is madness. It's like slaughtering the goose that lays the golden eggs. And then - won't other countries take their place? Yes, of course, the market will be rebuilt in a month or even less with great pleasure, and even this will have serious consequences - the computing power will be redistributed to other players, but those who have given up such a privileged position will hardly ever be able to regain it for themselves.

[Kakmakr]

So the governments all over the world is going to shutdown all electricity? WTF are these people smoking.....because that will never happen. Also, if say China stop all the mining being done in China... those miners will relocate to another country and the mining will continue. (Alternatively, they will sell their ASICs to people mining in other countries)

Let's say in theory that the governments manage to shutdown electricity.... what happens then? Well, most of these mining operations can run on Solar power and Wind power and Diesel generators... etc. etc... ( A massive difficulty adjustment, will even make GPU mining possible.. so you would need much less electricity to mine Bitcoin then)  

[Streets 2.0]

This is more like the scenario of some Hollywood blockbuster))) I completely agree that this requires at least a flash in the sun that will cut out most of the existing global electrical system, and even in this case it will not completely stop mining. Will only slow down the computational aggregate power a lot. And as soon as everything is restored (which I have no doubt about), everything will be the same again.

[hv_]

At least they should say "All government working together can stop Bitcoin by shutting down mining", it sounds more plausible than single government do it.

Yes- some of the bigger ones will do the job, still US long arms can do big part - no way Turkey and Saudis can do much without

[stomachgrowls]

So the governments all over the world is going to shutdown all electricity? WTF are these people smoking.....because that will never happen. Also, if say China stop all the mining being done in China... those miners will relocate to another country and the mining will continue. (Alternatively, they will sell their ASICs to people mining in other countries)

Let's say in theory that the governments manage to shutdown electricity.... what happens then? Well, most of these mining operations can run on Solar power and Wind power and Diesel generators... etc. etc... ( A massive difficulty adjustment, will even make GPU mining possible.. so you would need much less electricity to mine Bitcoin then)  

Pretty sure that government had already anticipated that and thats why they arent making those kind of steps which is totally dumb if i were to say where cutting down power lines or electricity just for the sole purpose
of stopping mining then its completely useless or would rather do harm than on benefit. Imagine on what other things being heavily dependent with electricity into their vicinity?

For sure they cant really afford to lose those just for the exchange on having the motive on shutting down bitcoin mining and just what mentioned when it comes to alternative energy then
it cant really be stopped no matter what angle they are trying to take.

Why wont they try it and prove out to their very own eyes that its not possible to stop it?