Ripple Co-Founder: China Can Take Control of Bitcoin

Chris Larsen, the co-founder and chief executive of Ripple, wrote an opinion piece in which he likens Chinese influence on Bitcoin to a cold war, and regrets the centralization of the largest crypto payment network. A little ironic, coming from a Ripple executive?

A new cold war between China and the United States

In his article for The Hill, Chris Larsen depicts a world where a new Cold War is emerging between the United States and China, with Bitcoin playing a key role.

He explains that the global financial infrastructure is modernizing and embracing new technologies, including digital wallets and blockchain. A golden opportunity for China to expand its influence, according to the ex-CEO of Ripple:

For China, this is a once-in-a-century opportunity [that could] wrest US stewardship from the global financial system, including its ultimate goal of replacing the dollar with a digital yuan.

China’s control over the Bitcoin network

Larsen explains that China’s stranglehold on the Bitcoin network is problematic:

At least 65% of cryptocurrency mining is concentrated in China, which means that the Chinese government has the majority necessary to take control over these protocols. and effectively block or cancel transactions.

The executive director of Ripple therefore concludes that the US is in danger of losing the technological battle that opposes China, which threaten the hegemony of the dollar.

In fact, China’s real influence on Bitcoin is a bit more complex than that. Yes, the share of hash rate coming from China is disproportionate (between 60 and 66% depending on the source). But – for now – the Chinese government does not appear to control this hash rate directly, despite having started regulating the sector since last year.

However, it is a threat that is very much in the imagination of the crypto community. Especially since it had been confirmed by a 2018 study which showed the potential for unparalleled control of China over the Bitcoin network.

Threat to come or publicity stunt for Ripple?

A bit of both probably. If China’s growing appetite for blockchain and the stranglehold of local miners are worrying, for the moment this is not enough to qualify the situation as a cold war, especially since it shows a vision that is still very American, centered on the Ripple part.

It should also be noted that Chris Larsen is not the only one of the Ripple team to make this connection. Brad Garlinghouse called Bitcoin a “Chinese controlled currency” a few years ago. The argument is therefore recurrent.

Last point: it seems quite ironic for Ripple’s pundits to tackle a cryptocurrency for its centralization. Knowing that theirs has been heavily criticized for the same reasons during its years of existence.

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