This came up as a side discussion in another thread, and I thought it would be interesting as a top-level discussion here.
The notion is this: although taking over 50% of the Bitcoin hashrate would be a practical impossibility for any private actor or even a small country, China, as a country, has at times hosted over 50% of Bitcoin's hashrate, and it's thus plausible they could make this happen again if they wanted to.
Its technically possible to control that 50% and requires huge investments to achieve, and btw in the case of China you make this sound like it's one stated owned entity running the show when in reality it's several independent entities that represent this virtual control under the umbrella of being labeled China The notion is this: although taking over 50% of the Bitcoin hashrate would be a practical impossibility for any private actor or even a small country, China, as a country, has at times hosted over 50% of Bitcoin's hashrate, and it's thus plausible they could make this happen again if they wanted to.
And whomever controls over 50% of the hashrate can dictate the software in use, and/or dictate the contents of the blockchain. As the theory goes, if China wanted to wreak havoc on the world economy, or if it wanted to extract a ransom, or if it simply wanted to profit by inserting its own blocks, then... it could. They could do anything.
It's actually more complicated that you make it sound, think of it like a car.. For a car to be functional several systems have to work for it to move, say the fuel system, the oil system, suspension etc and when it comes to Bitcoin... miners are one such system that contribute to its smooth running of it and for the record are not independent but are dependable on other systems such as nodes, etcetera. So this havoc you talk of is not possible as they need to also own a huge amount of bitcoin for a coordinated attack on the network otherwise if they had miners and owned a huge chunk of BTC they would have a shot at this... Perhaps China could decide that Satoshi's blocks should be given away to charity. Maybe they change the architecture so that it worked better in China, or conformed to their "laws" or something.
This now sounds liked a forked Bitcoin which would make it an altcoin and by the way before a fork happens a consensus has to be reached and not some dictator move to make things happen!