[RyanZAG]

I don't think the issue is a hard fork which would be bad for Chinese miners. It's more about Chinese miners being able to insert transactions. For example, the Chinese government getting all miners to commit to transferring some of the big 'unknown' blocks in the Bitcoin chain into Chinese government control for 'protection'.

That would cause minimal disruption while giving the Chinese government a massive payout. There's a lot of value for China to push that.

EDIT: This would actually cause a hard fork. Any non-Chinese node doing verification would pick up the illegal block and discard it, creating a fork between Chinese and non-Chinese -- with the Chinese fork having the majority of processing power behind it. At that point, you'd just need a Bitcoin client change to exclude the Chinese fork, I'd guess?

[trothamel]

I don't think that's possible, is it? My understanding is that the miners decide which of two competing valid transactions is the "real" one, in the case of double spending.

But miners don't have the power to cause an invalid transaction to become valid, if they were to insert an invalid transaction in a block, the block would be rejected by the rest of the network.

[matthewbauer]

Correct. You'd need the private keys to take someone's coins. You could still double spend though.

[RyanZAG]

Yeah that's right, you're correct.