Is address blacklisting possible on BTC?

[maikrothaman]

Even though I'm not a programmer, I believe blacklisting in Bitcoin will function in this way. The government will offer software for tracking tainted bitcoins. Some mining pools will be compelled (blackmailed) into installing and utilizing this tracking software. Big mining pools will produce blocks with non-tainted bitcoins. Due to the high level of network congestion, tainted bitcoin will have to pay extremely high transaction fees because the number of blocks produced by small mining pools is not very high. The miners who are not using the black list will still include your transaction if you pay a high fee. Additionally, you might have to wait for your transaction with tainted bitcoin to be added to the blockchain, which could take up to 2-3 hours. Finding the large mining pools and forcing them to use blacklists is fairly simple.

[BlackHatCoiner]

The government will offer software for tracking tainted bitcoins.

Everything is tainted, if you want it to be. The US government is already funding Coinbase and Chain analysis for analyzing the chain, two of which support tainting.

Some mining pools will be compelled (blackmailed) into installing and utilizing this tracking software

It doesn't matter, because whether the miner confirms the transaction or not, there's already a sufficient proportion of Bitcoin users who do bite tainting. Also, tainting is against miners' profit, so mining pools that support tainting already have an unreasonable market disadvantage.

Also, as I said, the network is decentralized. It doesn't matter if a government has a blacklist or wants to bribe pools, because the Bitcoin network isn't administrated by a government.

[pooya87]

Due to the high level of network congestion

I'm not sure if this is hypothetical or you are confusing bitcoin with an altcoin like ethereum. But in the past 13 years we only had "high level of network congestion" for a couple of months in 2017 when there was the biggest spam attack on bitcoin network in history, some of which was funded by centralized altcoins like DASH.

[o_e_l_e_o]

Although in reality people who took part on Bitcoin Core development have bigger influence than many people/group. Major update (such as SegWit and Taproot).

Absolutely, any changes to Core are highly likely to be widely adopted by the community, but they cannot "force" any changes on to the community which is what the original quote suggested. There have been plenty of contentious issues which have had significant push back, such as the recent full RBF option.

The government will offer software for tracking tainted bitcoins.

Such software already exists in the form of blockchain analysis companies and is widely used by centralized exchanges, centralized payment processors, and some other services and wallets. It is irrelevant if you simply avoid using such businesses and entities which are actively attacking bitcoin by enforcing the provable nonsense of "taint".

Some mining pools will be compelled (blackmailed) into installing and utilizing this tracking software.

And their miners will happily leave and join a different mining pool instead.

[maikrothaman]

Some mining pools will be compelled (blackmailed) into installing and utilizing this tracking software. Big mining pools will produce blocks with non-tainted bitcoins. Due to the high level of network congestion, tainted bitcoin will have to pay extremely high transaction fees because the number of blocks produced by small mining pools is not very high. The miners who are not using the black list will still include your transaction if you pay a high fee.

You're assuming miner will keep using that pool though. Miner with some idealism will switch to different pool immediately while many other miner will move when they realize they could earn more Bitcoin on different pool.

Finding the large mining pools and forcing them to use blacklists is fairly simple.

Unless the pool is hosted on county where it's government force all miner/pool implement black list, it'd be tricky.

With a few video cards in the past, I used to mine Bitcoin. Now, mostly only large miners currently mine Bitcoin. Power consumption can be used to identify even the majority of miners. These miners may be threatened with blackmail to use a particular pool. You can't conceal a sizable mining operation in your room any longer.

[o_e_l_e_o]

Power consumption can be used to identify even the majority of miners. These miners may be threatened with blackmail to use a particular pool. You can't conceal a sizable mining operation in your room any longer.

You are assuming three things here.

Firstly, you are assuming these miners are drawing power directly from the grid. We know that bitcoin mining uses a much higher proportion of renewable energy than any other industry. If you have a large mining operation powered largely by solar panels or wind turbines, then there is no electricity consumption from the grid to monitor.

Secondly, you are assuming that all these miners are in the same jurisdiction. If the US government is blackmailing miners they can identify to enforce some blacklist, you can almost guarantee that the Chinese or Russian governments (for example) will not give a damn about the US blacklist.

And thirdly, you are discounting all small scale mining operations, which are numerous and widespread.