Forget About The Strategic Bitcoin Reserve For A Moment Mining Censorship Is Back
The news got buried in part due to Trumps inauguration and subsequent rumblings of a Strategic Bitcoin Reserve (SBR), but developer b10c recently published research showing that F2Pool a mining pool representing ~11% of hash power on the Bitcoin network is censoring OFAC-sanctioned transactions again.
In case you dont know what this means: the US Department of the Treasurys Office of Foreign Asset Control (OFAC) maintains a list of sanctioned entities, including a number of Bitcoin addresses; its illegal to do business with these entities under US law. Its actually unclear if this means miners cannot include transactions to and from these addresses in blocks they produce but F2Pool appears to be rather safe than sorry.
Now, as long as its just F2Pool applying this policy, this is not really an issue. Some transactions will be delayed by about ten minutes or so, once in a while, but thats about it.
If more pools start doing it, the delays will get longer and more frequent but still not terrible. Not even if its a majority of pools.
The real issue will arise if a majority of mining pools not only censors transactions, but also refuses to build on top of blocks that do include these transactions. If this were to happen, these transactions wouldnt confirm at all anymore not for as long as these mining pools remain a majority. Bitcoin would no longer be censorship-resistant.
I cant really fault F2Pool for adopting their policy. Although I would much prefer it if no mining pools censor, we unfortunately live in a world where even open source software developers may face prison time for enabling users to transact freely.
Rather than flirting with an SBR, it would be great if the new Trump administration first just stopped such state attacks on Bitcoin.
This article is a Take. Opinions expressed are entirely the author's and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Text source: Bitcoin Magazine: Bitcoin News, Articles, Charts,
