China holds an alarming amount of power over Bitcoin miners in the United States. Congress should act to scale back the country’s influence.
Cryptocurrencies are rapidly becoming a critical piece of the United States economy and financial system. The value of Bitcoin
$67,119 has surged thanks to exchange-traded funds (ETFs) bringing access to a huge swath of new consumers. This is generally good news.
However, the rise of Bitcoin also brings with it the need for increased regulatory guardrails, similar to other emerging areas of tech, such as AI. In a globally connected world, where national security interests are thrust into the forefront with each new disruptive technology, risks around critical network and infrastructure vulnerabilities require urgent attention.
The threat of China continues to emerge at the center of these discussions. The U.S. has answered perceived technology threats — from companies like Huawei, TikTok, and Chinese EV manufacturers — with decisive actions. The risk within cryptocurrencies is even more alarming because Bitcoin miners represent a potential silent, sentient hardware layer integrated directly into U.S. energy and telecom infrastructure.
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Given the scope of this risk, it is beyond time for regulators to act and ensure Chinese crypto mining technology has zero chance to cripple vital U.S. utility and financial systems.
Bitcoin mining is the process by which new Bitcoins are entered into circulation. It is also the mechanism that secures the network by validating and confirming all transactions to the blockchain, Bitcoin’s underlying public ledger. Miners compete to solve complex mathematical problems; the first to solve the problem gets to add the next block to the blockchain and is rewarded with newly minted Bitcoins and transaction fees.
Requiring substantial computational power and energy, Bitcoin mining is executed through sophisticated mining rigs — high-performance computing systems, powered by advanced semiconductors called ASICs. China dominates the supply of ASICs for Bitcoin mining, supplying 98% of today’s chips, mainly from a few large manufacturers including a company called Bitmain. These chips designed in China are manufactured by TSMC, using their latest and most advanced manufacturing process (3nm).
