That China is a major player in setting bitcoin prices is already well-known. But Ripple CEO Brad Garlinghouse suggested yesterday that bitcoin's route to becoming the world’s primary cryptocurrency might falter due to China’s influence. (See also: Are Bitcoin And Crypto Prices Totally Dependent On China?)
“Bitcoin is really controlled by China. There are four miners in China that control over 50% in bitcoin. How do we know that China won’t intervene (in controlling bitcoin)? How many countries want to use a Chinese-controlled currency? It’s just not going to happen,” he told audiences at the 2018 Stifel Insight Cross Sector Conference in Boston yesterday.
Prominent figures have increasingly begun referring to bitcoin as a world currency in the making. For example, Twitter Inc. (TWTR) CEO Jack Dorsey told London’s Sunday Times in March that bitcoin could become the world’s single global currency in ten years. Apple Inc. (AAPL) co-founder Steve Wozniak echoed Dorsey'sthoughts this month with the caveat that he did not necessarily believe that it would happen. (See also: Steve Wozniak: Bitcoin Scammer Stole My Cryptocurrency.)Garlinghouse called the idea of a primary world currency “absurd” and said that it did not make any sense. “I don’t think any major economy will allow that to happen,” he said.
How China Controls Bitcoin
China has two advantages as far as bitcoin is concerned.
First, it is home to a majority of mining operations for bitcoin. This confers it the power to control the supply of coins in the market and to raise transaction fees based on mining difficulty. As has been the case in the last year, high transaction fees could dissuade use of bitcoin for daily transactions and make it more cost-prohibitive for trading. Second, China is also home to some of the biggest cryptocurrency exchanges for trading bitcoin, such as Binance. These exchanges clock high trading volumes and attract international retail investors due to their cheap fees.
To be sure, the idea of a global currency is not new. Noted economist John Maynard Keynes proposed the idea for a global currency during the 1944 Bretton Woods conference. A central bank, called the International Clearing Union, would be responsible for issuing bancor, a global currency that would trade on par with national currencies. The bancor would be used for trades between nations, thereby removing imbalance in exchange rates and the inherent advantages and disadvantages that are associated with it. (See also: One World, One Currency: Could It Work?)
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.21bitcoin and 1 Litecoin.
FAQs
Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use.
What country is behind Bitcoin? ›
China has two advantages as far as bitcoin is concerned. First, it is home to a majority of mining operations for bitcoin. This confers it the power to control the supply of coins in the market and to raise transaction fees based on mining difficulty.
Why buy Ripple over Bitcoin? ›
Ripple is the company that is behind XRP, the cryptocurrency. Bitcoin transaction confirmations may take many minutes with high transaction costs, while XRP transactions are confirmed in seconds with little cost. XRP is a technology that is mainly known for its digital payment network and protocol.
How much will the crypto market be worth in 5 years? ›
Potential Highs & Lows of Bitcoin Price
| Year | Potential Low | Potential High |
|---|
| 2023 | $18,200 | $31,000 |
| 2024 | $15,500 | $31,000 |
| 2025 | $21,500 | $53,000 |
| 2030 | $30,000 | $100,000 |
Jul 8, 2023
As Bitcoin is decentralised, the network as such cannot be shut down by one government. However, governments have attempted to ban cryptocurrencies before, or at least to restrict their use in their respective jurisdiction. Governments could still try to jointly ban Bitcoin.
How much Bitcoin does Chinese government own? ›
Governments Holding the Most Bitcoin
Governments across the world own an estimated 244,779 BTC, representing 1.17% of the total supply. The Chinese government reportedly holds 194,000 BTC that was recovered from the Plustoken scam in 2019. Members of the Ukrainian government privately hold roughly 46,351 BTC.
How much is $1 Bitcoin in US dollars? ›
Is Bitcoin legal in USA? ›
Bitcoin is legal in the U.S. But it is not “legal tender.” This means that unlike the U.S. Dollar, which must be accepted for “All Debts Public and Private,” nobody is required to accept Bitcoin as payment.
Which country owns most Bitcoin? ›
Top Countries
- USA (46 million)
- India (27 million)
- Pakistan (26 million)
- Nigeria (22 million)
- Vietnam (20 million)
It is impossible for XRP to ever overtake Bitcoin's rate. XRP would then have to increase 50,000 times while Bitcoin would stand still. The more coins available, the lower the value of one coin will be. Bitcoin has a limited supply – 21 million coins.
Ripple collaborates with financial institutions worldwide; more than 100 financial institutions have joined RippleNet, including:
- Santander (USA)
- Canadian Imperial Bank of Commerce (Canada)
- Kotak Mahindra Bank (India)
- Itaú Unibanco (Brazil)
- IndusInd (India)
- InstaReM (Singapore)
- BeeTech (Brazil)
- Zip Remit (Canada)
Conclusion. If you belong to the group of crypto users who were hoping that the lawsuit outcome could bring XRP some more significant value growth, you are probably disappointed after all this. As you can see, the chances of that happening are very small.
Could Ripple reach $10,000? ›
It's pretty clear that XRP will never reach a price of $10,000, as the coin's market capitalization would be unrealistically larget at that price. The only way 1 XRP could be worth $10,000 would be through a massive coin burn program or a redenomination of XRP.
Which crypto will 100x in 5 years? ›
Three Cryptos To Hold For 5 Years For 100x Profits; Binance Coin (BNB), RenQ Finance (RENQ), Cardano (ADA) In this article, we'll take a look at Binance Coin (BNB), Cardano (ADA), and RenQ Finance (RENQ), three tokens that will generate 100x returns in the next five years.
How much will $1 Bitcoin be worth in 2030? ›
Bitcoin Prediction Table
| Year | Minimum Price | Average Price |
|---|
| 2029 | $344,443.53 | $356,843.15 |
| 2030 | $510,780.23 | $528,622.39 |
| 2031 | $754,419.07 | $775,563.98 |
| 2032 | $1,099,084.07 | $1,137,862.26 |
6 more rowsAlthough this mystery may never be resolved completely, there have been previous mentions of the CIA – or the FBI – creating Bitcoin. Unfortunately, neither of these claims seem particularly valid, as there is no concrete evidence pointing in that direction.
Is the government controlling Bitcoin? ›
The Federal Reserve is focused on regulating banks and the United States dollar, so cryptocurrencies are generally outside its sphere of influence. Crypto and the Fed overlap when banks hold cryptocurrency as an asset on their balance sheets.
