Thiel pointed out the risks related to Bitcoin when being under China’s control and that it is a tool to threaten the US dollar.
The reputed investor of risk markets and Bitcoin enthusiast, Peter Thiel, warns about the degree of control that China has over the digital currency and invited the US government to consider stricter regulations in this ecosystem.
Thiel released this warning during a virtual event held by members of the Richard Nixon Foundation. Thiel took advantage of the space to express his worries about Bitcoin representing a threat to the US dollar, as many other critics have pointed out in the last months.
Thiel Commented on the Matter:
“I wonder if at this point Bitcoin should also be seen in part as a Chinese financial weapon against the US… It threatens fiat money, but especially threatens the US dollar… [in the face of] China’s long reach on Bitcoin. Perhaps from a geopolitical perspective, the US should be asking itself some tough questions about how exactly this works. “
Although Thiel proclaims himself as a “pro-crypto, pro-Bitcoin maximalist,” his statements reveal a more significant concern on the tycoon, highlighting the possibility that the digital currency would represent a risk for the American nation, mainly from a geopolitical perspective.
Bitcoin, its Situation in China, and the Leadership in Mining
Some opinions highlight that China is allegedly behind Bitcoin, a currency whose operation, in theory, is decentralized and distributed. For analysts and critics, this thesis takes on particular importance in the face of mining groups that support digital currency.
Even though the Chinese government has an ambivalent position regarding the use of Bitcoin and digital currencies at the local level (more inclined towards their prohibition), they do not seem to have mining problems.
Many districts of the Asian country seem to be very attractive for this practice because of the low energetic costs, which have also attracted several investors and operators of mining farms that operate in the region.
The most worrying aspect, precisely associated with the Bitcoin mining pools, is that more than 51% of the Bitcoin network’s processing power links to four entities: F2Pool / Poolin / Huobi.pool / Antpool. All of these are under the control of companies with operations headquarters in China.
According to reports from the University of Cambridge and Buybitcoinworldwide.com portal, there are estimations that by 2020 at least 81% of mining activities will set their operations in China.
This leadership in mining implies centralizing these tasks within the Asian country, leaving these at the mercy of the legal frameworks and regulations under the local government’s control and development.
The People and Pools that Control More than 51% of the HASH on the Network in 2020
During his digital discussion participation, Thiel also spoke about some ideas with former secretaries of state Mike Pompeo and the previous national security adviser Robert O’Brien. There the investor also appeared to be worried that companies like Google have some commercial mutualism with China.
By: Jenson Nuñez
