The 51% attack happens when the majority of the mining network participant take the control over the network. As Wallebi reported previously, the biggest Bitcoin mining farms are located in China. In fact, China owns the majority of hashrate of Bitcoin mining network. Perhaps it became a question in your mind too, that why Chinese miners don’t run a 51% attack.
The co-founder and CTO of Casa, Jameson Lopp explained on his blog that why Chinese miners cannot run a 51% attack in Bitcoin network.
As we mentioned above, China accounts for more than half of the Bitcoin mining capacity. As a result, some people are worry about the future of Bitcoin network. They worry that Chinese miners may run a 51% attack in Bitcoin network.
Why Chinese Miners Don’t run a 51% Attack; It’s not as easy as you think
The truth is that although the Bitcoin hashpower is mostly concentrated in China, it is not easy to run a 51% attack. Jameson Lopp explained on his blog post that even if Chinese miners decide to run such attack, the attackers are limited in what they can do.
He added that in this case if happen, the attackers won’t be able to steal other people’s Bitcoins. They can’t reverse valid transactions or change the consensus. They can only double spend their own Bitcoins.
When the attackers could double spend their own Bitcoins, they need to cash out and withdraw the Bitcoins. In this case, they need to transfer them all to an exchange platform and exchange it with stablecoins or withdraw it in cash. These days the regulations are changed. Most exchanges have KYC/AML procedure. As a result, it won’t be easy for attackers to convert their Bitcoins to cash.
The other reason could be price reduction. If miners start to sell large amounts of Bitcoin in the market, the price will drop dramatically. Price reduction is not something miners are looking for. Miners always seek to price growth.