CHINESE SABOTAGE

Bitcoin is vulnerable to sabotage from the Chinese government because of its overwhelming exposure to the country, researchers have warned.

Beijing could render the Bitcoin network effectively useless by taking control of the powerful computers used to maintain the digital currency, which are largely based in China, according to a report from security companies Hacken and Gladius.

Bitcoin is seen by its supporters as free of government control, a feature that is highlighted as one of its key benefits. The digital currency is maintained not by any central organisation but by a collection of “miners”, computers that are rewarded in new Bitcoins for updating the ledger of all transactions known as the blockchain.

As Bitcoin has grown, it has required more expensive and powerful computers, and meant mining has migrated to parts of the world where electricity is cheap, in particular China.