China is, by some distance, the undisputed world leader in bitcoin mining — with Chinese mining pools controlling more than 70% of the bitcoin network’s collective hash rate (a higher hash rate is better when mining cryptocurrencies as it increases your chance of finding the next block on the chain and receiving the bitcoin reward).
Many in the bitcoin and cryptocurrency industry have expressed concern about how much control this gives China over bitcoin, with the Beijing-based Bitmain Technologies mining more than half the world’s bitcoins.
Now it appears U.S. president Donald Trump’s White House is also worrying about China’s bitcoin dominance, with a Ripple Labs executive suggesting the U.S. administration is interested in ripple (XRP) adoption to offset China’s bitcoin strength.
“The White House in particular seems to be thinking about what it means to have 80% of bitcoin mining taking place in China and a majority of ether mining taking place in China,” Ripple Lab’s chief strategist, Cory Johnson, said in a wide-ranging interview with crypto-focused magazine Breaker.
“When you look at XRP, there is no mining, so from a foreign-control aspect or from an environmental aspect, XRP is a very different beast. And in conversations we’ve had with the administration, they seem to get that and think that might matter.”
China manufactures most of the world’s bitcoin and cryptocurrency mining equipment and its massive mining farms are supported by the country’s cheap electricity prices.
Meanwhile, Ripple Labs controls 60% of the ripple supply, leading to critics of the company and the digital token suggesting it is not decentralized like many other cryptocurrencies.
September was a good month for Ripple Labs and the digital token it created XRP (which is often referred to as ripple).
Ripple’s Swell event in San Francisco saw former U.S. president Bill Clinton talk up the possibilities of blockchain and cryptocurrencies and Ripple revealed it had signed up three financial services companies to its new XRP-focused product — news of which had sent the ripple price up by over 100% earlier in the month.
The three companies – payment providers MercuryFX and Cuallix as well as cooperative financial firm Catalyst Corporate Credit Union – were announced as the first to sign up to xRapid by Ripple Labs CEO Brad Garlinghouse.
Earlier this year, global banking giant Santander launched a blockchain-based application for cross-border foreign exchange built by Ripple Labs — designed to speed up and cut the costs of sending money across borders.
Many are excited by ripple’s practical use case, which has seen it work with many of the world’s biggest banks and financial service companies to bring cryptocurrency’s speed and efficiency to the rather clunky legacy financial systems.
“When I started to meet with people in government and regulators, I had very low expectations,” Johnson added. “I have been truly amazed at the open-mindedness, number one. And number two, the smart questions, sometimes even tough questions. There’s clearly a lot of homework going on.”