The Looming Threat of China: An Analysis of Chinese Influence on Bitcoin

TL;DR

This paper analyzes China's influence on Bitcoin, highlighting its capabilities and motives to threaten Bitcoin's security and stability through various attack vectors and control over infrastructure.

Contribution

It systematically examines China's potential attack strategies on Bitcoin and documents its influence, providing a comprehensive understanding of the threat.

Findings

China has strong motives and capabilities to attack Bitcoin.

China's influence can destabilize Bitcoin through various attack methods.

China's control over infrastructure enhances its ability to influence Bitcoin.

Abstract

As Bitcoin's popularity has grown over the decade since its creation, it has become an increasingly attractive target for adversaries of all kinds. One of the most powerful potential adversaries is the country of China, which has expressed adversarial positions regarding the cryptocurrency and demonstrated powerful capabilities to influence it. In this paper, we explore how China threatens the security, stability, and viability of Bitcoin through its dominant position in the Bitcoin ecosystem, political and economic control over domestic activity, and control over its domestic Internet infrastructure. We explore the relationship between China and Bitcoin, document China's motivation to undermine Bitcoin, and present a case study to demonstrate the strong influence that China has over Bitcoin. Finally, we systematize the class of attacks that China can deploy against Bitcoin to better understand the threat China poses. We conclude that China has mature capabilities and strong motives for performing a variety of attacks against Bitcoin.