Last Wednesday I pointed out that Bitcoin transactions failed to meaningfully grow in 2015; last Friday, a disenchanted Bitcoin insider revealed the inside story in this powerful Medium post. It's pretty ironic, because for years, Bitcoin enthusiasts have insisted it's not a virtual currency the same way Linden Dollars or another MMO currency is. But as it turns out, Bitcoin's growth is being stymied by a problem that's pretty much what's plagued MMOs like World of Warcraft for years -- gold farming from China. Here's why:
[T]he block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power. At a recent conference over 95% of hashing power was controlled by a handful of guys sitting on a single stage. The miners are not allowing the block chain to grow.
Why is that such a problem? Ironically enough for a currency that is so appealing to libertarians -- because of well, the Chinese Communist Party:
[T]he Chinese internet is so broken by their government’s firewall that moving data across the border barely works at all, with speeds routinely worse than what mobile phones provide. Imagine an entire country connected to the rest of the world by cheap hotel wifi, and you’ve got the picture. Right now, the Chinese miners are able to — just about — maintain their connection to the global internet and claim the 25 BTC reward ($11,000) that each block they create gives them. But if the Bitcoin network got more popular, they fear taking part would get too difficult and they’d lose their income stream. This gives them a perverse financial incentive to actually try and stop Bitcoin becoming popular.
There's a lot more involved, but that's the core of the issue. So to sum up: A virtual currency which promised to free us from government oversight and oppression is being successfully strangled in its crib by one of the world's most oppressive regimes. Without hardly even trying. Atlas shrugged? More like Atlas, slugged.
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