What Is A Bitcoin Mining ‘Double Spend’?
Worth mentioning is that Bitcoin is a threat to China’s introduction of the e-Yuan digital currency in Hong Kong. I have little doubt that China will cease Bitcoin mining and would not hesitate to create a condition called a “double spend” which would effectively ruin Bitcoin’s ecology.
A double or multiple spend effectively creates counterfeit Bitcoin and can only be effected by a majority of miners. China, which does approximately 65% of the Bitcoin mining could create this condition all on their own. Although, it’s highly likely the Chinese government would likely say it was the Bitcoin miners- not them. They could argue the Russians and Iranians also participated in this potential internecine warfare (wink, wink).
Digital e-Yuan verses Bitcoin
Bitcoin may rise more over the shorter term. But longer term I see no chance it will hold up as a store of value – as an asset that, for instance, might compete with gold, whose long-term prospects I believe are sensational (as I explore in depth in my latest book China’s Rise and the New Age of Gold).
Why? For one thing – and there are other reasons as well – China won’t let it happen, because a triumphant Bitcoin would run counter to China’s plans for its own digital currency, the e-yuan. While China has banned Bitcoin exchange trading on the mainland, the cryptocurrency is traded on exchanges in other Asian countries and in Hong Kong. China plans to use Hong Kong as a hub for international use of the e-yuan in cross-border transactions. If Bitcoin continues to make waves, China would view it as a threat to e-yuan adoption and would not hesitate to quash Bitcoin.
And it has the means to do so. When it comes to both Bitcoin and Tesla, China holds all the cards. Putting aside Tesla for a moment, realize that China currently carries out 65% of global Bitcoin mining. That on its own is enough for China, if it chooses, to create what’s known as a “double spend.” This refers to a situation in which a single Bitcoin is used for multiple transactions, the antithesis of what is supposed to be the case. In effect, it would create counterfeit Bitcoin, thereby destroying the entire ecosystem on which Bitcoin is based.
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