Hacker News new | comments | show | ask | jobs | submit login

If China were to shut down bitcoing mining, my understanding is that the worst case scenario is much more dire. The network only adjusts the 'difficulty' relative to current network hash power every 2,016 blocks. Depending on the severity of the overall hash power reduction, new block discovery might slow down significantly. This would also delay a recalculation of the new difficulty accommodating the reduction in hash power.

The network could be severely throttled for weeks.

How can you actually shut down mining? Maybe they'd make it harder for miners to convert bitcoins to fiat, but that wouldn't stop the mining.

I doubt they actually care about the mining, but they certainly could shut it down if they wanted to. I mean, it's China. It's not exactly difficult to locate the miners either - look for the building using 400 MW that doesn't have any steel or widgets coming out.

But I think the parent's point was that, if the Chinese exchanges were shut down, that could have a big impact on price if the hypothesis is true that most bitcoin activity is evading Chinese capital controls. If the hit was big enough it might push mining into unprofitability. This is all speculation, but not impossible.

First, yes, there are large farms of miners, but that's only some of the mining power. While these mining farms can be targeted and shut down, a significant amount of mining power is actually held in places that wouldn't be easy to locate. Those miners are going to keep mining as the owners have a strong economic incentive to do so, even if their mining pool in China gets shut down. They could, for example, just connect to a pool outside of China.

Also, what would happen to all the mining equipment should a mining farm get shut down? If the shut down is permanent, you can bet the people that own those machines would try to sell those miners as quickly as possible to people outside the country that can run them.

The economic incentives of bitcoin are such that there will be significant resistance to any government attempts at shutting down.

FWIW, the largest Bitcoin mine in the world is more like 10MW, and most are significantly smaller than that.

I do agree though that shutting down the larger Chinese mines wouldn't be too difficult if the government had the will to do it.

> How can you actually shut down mining?

You may not be able to shutdown mining, per se, but if you are the PRC government, you may be able to isolate miners in China from the network (especially if it is important enough to you to accept false positives), which has the same pragmatic effect.

"the worst case scenario"

"The network could be severely throttled for weeks"

That's exactly what would stabilize it instead of it having the wild multi-hundred dollar swing it's experienced essentially since inception. It's the wild hashing power China currently holds right now that's giving it the dominant influence over the currency. Reduce the dominance, spread the risk, stabilize the currency.

This is like a basic lesson that was taught in the TV series "Reboot" with Dot Matrix vs Captain Capacitor - Diversification.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact