“If the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly,” said Curtis Spencer.
Electric Capital co-founder and partner Curtis Spencer implied that the Bitcoin network may owe its continued existence to the grace of world governments.
In a panel at the Collision web summit on Tuesday, Spencer said lawmakers are the ones giving Bitcoin (BTC) a chance to grow by not imposing harsher restrictions on mining operations in their respective countries. The Electric Capital executive was speaking on the state of investing in cryptocurrency in 2021, alongside Michael Jordan of Galaxy Digital, Kartik Talwar of A Capital, Ash Egan of Accomplice, Tara Tan of IDEO CoLab Ventures and moderator Min Teo of Consensys.
“Could Bitcoin really be stopped by government?” asked Spencer. “I actually think maybe it could be. If you think about the cost of attacking the network, it’s not something that nation-states couldn’t do.”
“Look at what happened in Xinjiang. You could shut down the Bitcoin mining network actually pretty quickly, especially if the U.S. stopped all the U.S. miners, Kazakstan stopped all the miners there — that kind of shuts down 80% to 90% of the hash rate pretty quickly. I think the fact that [Bitcoin is] still here means governments are supportive.”
Spencer was referring to recent events in the Xinjiang region of China, which represents roughly 25% of Bitcoin’s global hash rate. Crypto market analyst Willy Woo claimed that BTC’s crash to the $50,000s over the weekend was a result of a power outage in the area, subsequently dropping the hash rate from 172 terahashes per second to 154 million TH/s.
The power outages were reportedly initiated to facilitate safety inspections in the region, implying that there’s seemingly nothing stopping the Chinese government from intentionally dropping the hash rate. Though fellow panelist Jordan argued that lawmakers were starting to shift their positions on crypto, he was seemingly referring to authorities not trying to shut down the network on the internet rather than attacking miners.
“You hear regulators speaking with a newly sophisticated term, which is that ‘You can’t ban Bitcoin,’” said Jordan. “You can basically cut yourself out of innovation and participation and economic growth that these systems precipitate for other citizens, but you can’t actually ban it.”
At the moment, the regulatory environment in the United States seems to be favoring crypto miners rather than pulling the plug on them — though some farms in Texas did have to restrict operations during a massive winter storm this year. Kentucky lawmakers also recently passed two bills that would give tax breaks to crypto miners in an effort to attract new firms to the state.