Has a Bitcoin Transaction ever been censored?

[Wind_FURY]

Can a Bitcoin OG answer OP's question? There hasn't been any indication that a Bitcoin transaction was censored from my research, because if there was, and it could be done again on a whim, then I believe Bitcoin can be called a "failure".

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[pawanjain]

In the below video at 33:42 min Charlie Lee says that Litecoin (and Bitcoin) can be censored if the Litecoin was previously used in illicit activity.

https://www.youtube.com/watch?v=C_pTOomVtI8

Were there any Bitcoin transactions that were actually censored in the history of Bitcoin?

Thank you

It actually depends on what type of platform you are using. For instance if you are on an exchange and if you are doing some illicit transactions such as purchasing guns/drugs on the darkweb and sending your bitcoins from your exchange account to that dealer's address and if the cops trace you down or if the exchange finds that out then yes your account might get blocked for illicit actions.

But if you are using a wallet such as Mycelium/Electrum where you own the private key of your bitcoin address then you don't need to worry about getting blocked. You can simply create a new address every time (these wallets automatically does that for you actually)

Note : Information provided above is just for Educational purpose.

[o_e_l_e_o]

There hasn't been any indication that a Bitcoin transaction was censored from my research, because if there was, and it could be done again on a whim, then I believe Bitcoin can be called a "failure".

Yes, there has. See this thread from 2010: overflow bug SERIOUS

Essentially someone found and exploited a bug which allowed them to create 184 billion bitcoin out of thin air. Satoshi wrote and published a bug fix for it within a few hours, which soft forked bitcoin to undo this transaction and remove the bitcoins it created.

See here for some more information: https://en.bitcoin.it/wiki/Value_overflow_incident

I wouldn't say this was done "on a whim", nor that it means bitcoin is a "failure". There was consensus among all users to fix a critical and bitcoin-ending bug. Any time a chain reorganization has been proposed to reverse a transaction simply because some users did not like it - for example, when Binance proposed a chain reorg to recover the funds they lost due to a hack - it has been roundly rejected by the community.

[Leviathan.007]

Wondering what exactly do you mean by getting censored. considering bitcoin was designed on a decentralized network as long as it stays decentralized, nothing can be censored. Generally, bitcoin is a open source and border-less network and nothing can change this rule. So, there will be no censorship in bitcoin transaction by anyone.

[pooya87]

There hasn't been any indication that a Bitcoin transaction was censored from my research, because if there was, and it could be done again on a whim, then I believe Bitcoin can be called a "failure".

Yes, there has. See this thread from 2010: overflow bug SERIOUS

Essentially someone found and exploited a bug which allowed them to create 184 billion bitcoin out of thin air. Satoshi wrote and published a bug fix for it within a few hours, which soft forked bitcoin to undo this transaction and remove the bitcoins it created.

See here for some more information: https://en.bitcoin.it/wiki/Value_overflow_incident

that is not the same thing!
"censoring transactions" means for example you have 1BTC and would be unable to spend it because all the nodes and all the miners reject your perfectly valid transaction.

what happened here (the overflow bug) was just a bug where a miner create an invalid block that had to be purged/rejected because it was invalid.

[o_e_l_e_o]

-snip-

I mean, it depends on your definition of "censoring a transaction". I agree that the value overflow bug wasn't censorship in the sense that most people think about it, but it was still a transaction which one individual broadcast, was accepted and mined, existed for 53 blocks, and then was reversed due to community consensus.

Now, as I said, this was a critical bug which would have rendered bitcoin obsolete had it not been fixed and reversed, so it's probably not what OP was talking about when he asked about censorship, and any time censorship or reversing a transaction has been proposed for other reasons it has been rejected.

[witcher_sense]

Does this philosophy include the non-use of the Lightning Network then?

Lightning Network is just a second layer built on top of main network and cannot function without base layer. It uses main network for final settlements and relies on bitcoin's security model meaning bitcoin network is still more important than payment networks such as Lightning Network. Payments or micropayments occuring within Lightning network are peer-to-peer, there is no clearing house operating between buyers and sellers. Your transactions cannot be censored by other nodes because of onion routing system. Nodes simply don't know who is the real payer and who is real payee. Essentially, the main benefit of Lightning Network is that it provides censorship resistance of the same level as main network does.

This philosophy recommends use of censorship resistant peer-to-peer protocols built on top of main censorship resistant peer-to-peer protocol.

[Wind_FURY]

There hasn't been any indication that a Bitcoin transaction was censored from my research, because if there was, and it could be done again on a whim, then I believe Bitcoin can be called a "failure".

Yes, there has. See this thread from 2010: overflow bug SERIOUS

Essentially someone found and exploited a bug which allowed them to create 184 billion bitcoin out of thin air. Satoshi wrote and published a bug fix for it within a few hours, which soft forked bitcoin to undo this transaction and remove the bitcoins it created.

See here for some more information: https://en.bitcoin.it/wiki/Value_overflow_incident

I wouldn't say this was done "on a whim", nor that it means bitcoin is a "failure". There was consensus among all users to fix a critical and bitcoin-ending bug. Any time a chain reorganization has been proposed to reverse a transaction simply because some users did not like it - for example, when Binance proposed a chain reorg to recover the funds they lost due to a hack - it has been roundly rejected by the community.

I was talking about censorship of a transaction in Bitcoin. Because you see, which I know you already know, censorship-resistance is the effect of decentralization, then if there was censorship, why then is it decentralized for? It's failure.

[Picard78]

"censoring transactions" means for example you have 1BTC and would be unable to spend it because all the nodes and all the miners reject your perfectly valid transaction.

It appears a valid transaction has never been censored systemically by the entire network.  Charlie Lee perhaps should have used a word other than censored.

My conclusion from this discussion is that my Bitcoin can always be spent via the Bitcoin protocol layer.  However, if I interact with a centralized institution they may not accept "tainted" Bitcoin.

[o_e_l_e_o]

My conclusion from this discussion is that my Bitcoin can always be spent via the Bitcoin protocol layer.  However, if I interact with a centralized institution they may not accept "tainted" Bitcoin.

This pretty much sums it up.

The only change I would make to this is your use of the word "accept". There is no way for centralized exchanges to stop you depositing tainted coins to a deposit address they have provided you with. In that way, there is no way for them not to "accept" your deposit. However, once you have made your deposit, if they do not like where your coins have come from they may do any number of things. Only the minority will return your coins to you with no further issues. The vast majority will freeze your account and demand that you complete KYC in order to have your coins returned. You can avoid this issue with centralized exchanges by simply not using them and using DEXs instead, which is also far better for your privacy.

[imstillthebest]

 litecoin is just an ordinary crypto and i guess that it was also involved on illicit acts before but those acts were only minor that it didnt end up on the news or being talked about on the forum  .

 litecoin team have may not heard of that or they heard of that but they dont take that seriously so litecoin is still not censored  but bitcoin ? the coin was known for that use . why they dont make bitcoin transactions censored ? 

[Hypnosis00]

 litecoin team have may not heard of that or they heard of that but they dont take that seriously so litecoin is still not censored  but bitcoin ? the coin was known for that use . why they dont make bitcoin transactions censored ? 

I don't think that exchanges would like to know where this Bitcoins coming from, and this is not important. Everything that made a transfer will not be filtered anymore just to know the origin for this unless it was questionable or suspicious transactions. But since it doesn't look like that, exchangers will allow it until it confirmed by the miners.

Litecoin didn't make this thing to happen, Bitcoin transaction is traceable and that could be enough, ain't that we need to clarify and must know where it comes.

[Wind_FURY]

"censoring transactions" means for example you have 1BTC and would be unable to spend it because all the nodes and all the miners reject your perfectly valid transaction.

It appears a valid transaction has never been censored systemically by the entire network.  Charlie Lee perhaps should have used a word other than censored.

My conclusion from this discussion is that my Bitcoin can always be spent via the Bitcoin protocol layer.  However, if I interact with a centralized institution they may not accept "tainted" Bitcoin.

Shower thought, if enough Bitcoins are held in 3rd-party custodians' wallets, will it be less censorship-resistant, and therefore considered not fulfilling its purpose?

[o_e_l_e_o]

Shower thought, if enough Bitcoins are held in 3rd-party custodians' wallets, will it be less censorship-resistant, and therefore considered not fulfilling its purpose?

I don't think so.

Those bitcoins (the ones being held by third parties) are never censorship resistant from the user's point of view, since the third party holding the coins can choose to refuse to sign any transaction they want (not to mention simply make off with your bitcoin at any time). Bitcoin itself as an entity is no less censorship resistant, as the owner of the coins in the third party wallet (which is the third party) can still broadcast any valid transaction they like and the network will broadcast and mine it.

If users choose to give up their censorship resistance, their privacy, their security, and all the other benefits bitcoin brings by giving their bitcoin to someone else to have ownership of, then that's their decision and their loss. But it doesn't change the bitcoin protocol, and the person or entity they give their bitcoin to still has the same censorship resistance, privacy, security, etc. as any other user.