[2020-11-12]A Bitcoin Mining Pool Is Deliberately Censoring Transactions

[Karartma1]

BlockSeer, a blockchain analytics firm, has launched a private beta version of the BlockSeer Mining Pool, a mining pool that censors certain transactions. And it’s not without controversy.
While BlockSeer’s mining pool is still in its private beta, if this sparks a trend, it could make it very difficult for the regular user to use Bitcoin. Since transactions can’t be made without a miner choosing to put them in a block, Bitcoin miners and pools wield a lot of power. Critics argue this, if this became the norm, it could cause a problem for Bitcoin.

More at https://decrypt.co/48025/bitcoin-mining-pool-that-censors-transactions-sparks-debate

This will turn bad. As Fluffypony put it "It’s only a matter of time till most Bitcoin mining pools are forced to do this transaction filtering. Might be time to dust off p2pool + focus on Stratum v2 support for pools. Also worth noting that adding more privacy to Bitcoin would prevent this."

[odolvlobo]

It's a waste of effort. Only the blocks that the pool adds to the chain will be censored, and transactions not included in those blocks will be included in the other blocks. The worst that can happen is that an affected transaction takes a little longer to confirm.

[Lucius]

I don't see who would use such software at all, maybe some mining pool sponsored by some government or maybe Roger Ver&Faketoshi CW to try to damage the BTC in this way. Regular miners have no interest in blocking transactions because they are their source of income, and I am sure that all those who would go in this direction would quickly be marked as bad miners.

Would it be technically possible to somehow block such mining pools if they really started to pose a bigger problem?

[Carlton Banks]

also, such a pool will struggle to maintain competitiveness even in today's mining market, let alone after subsequent block reward halvings (the 2024 reward halving will reduce the reward to 3.125 BTC every block, and after 2028 the transaction fees earned per block by miners will be a significant proportion of the 1.5625 BTC block reward)

but hey, if you can't beat 'em, join 'em. Right guys? This is all very amusing, it seems that the dying financial system's bid to thwart Bitcoin consists mostly of... becoming part of the Bitcoin economy

[acquafredda]

Let them waste their resources to mine their friends of friends transactions. I agree with Carlton Banks because I find this whole story very entertaining. So long as the can not touch, modify, alter and make the bitcoin protocol as they would like, let them mine at a loss.
Our transactions will get through either way 

[figmentofmyass]

I don't see who would use such software at all, maybe some mining pool sponsored by some government or maybe Roger Ver&Faketoshi CW to try to damage the BTC in this way.

.....or they are paranoid and dumb enough to believe craig wright et al's FUD about the legal repercussions around processing "illicit" transactions. https://coingeek.com/craig-wright-bitcoin-is-no-good-for-illicit-activity-and-heres-why/

Large, professional transaction processing operations cannot fly under the radar due to their size. They are also now able, thanks to Miner ID, to reveal and verify their identity when confirming blocks. These conditions, along with the money and work they’ve invested in building their operations, disincentivizes non-compliance or engagement in illicit activity.

Bitcoin’s protocol rules that new coins (i.e. those “discovered” by transaction processors) cannot be spent until a further 100 blocks have been processed. This allows ample time for a block to the “orphaned,” or discarded by the network.

he implies that a miner majority will eventually collude to censor the blocks of "rogue" miners. you buy that theory?

indeed, anyone mining with blockseer would be shooting themselves in the foot, obviously damaging their own profitability. this is an interesting experiment, but not one i expect to be particularly successful.

Would it be technically possible to somehow block such mining pools if they really started to pose a bigger problem?

by orphaning their blocks from the best chain, yes.

it's not necessary though. let them mine a few less profitable blocks, if they can even get the hash power together. who cares? bitcoin already works via economic incentives, and honest miners will confirm "censored" transactions in subsequent blocks.

let these idiots shoot themselves in the foot. rational miners (the vast majority of the network) aren't dumb enough to join them.

[Karartma1]

I said it in a connected thread and I will say it here too. What if these pools are going to be subsidized by agencies, governments for doing this kind of work? They wouldn't mind mining at loss. Remember that Chainalysis started with a small government grant and look where it is now. I would not discard the news so easily.

[Lucius]

he implies that a miner majority will eventually collude to censor the blocks of "rogue" miners. you buy that theory?

indeed, anyone mining with blockseer would be shooting themselves in the foot, obviously damaging their own profitability. this is an interesting experiment, but not one i expect to be particularly successful.

It's hard for me to imagine that someone who has even little common sense can believe something that comes from Faketoshi CW, that man is so entangled in his lies that he himself does not know what is true or false. I have no doubt that there will be various attempts to censor transactions, mark coins as bad and all the way to attempts to create some new legitimate Bitcoins. But no matter how much effort and money they put in, they can't change the minds of millions who know what is true and what is a lie.

What if these pools are going to be subsidized by agencies, governments for doing this kind of work? They wouldn't mind mining at loss.

I think you have quite good answers in previous posts, because regardless of whether someone did it for profit or just wants to control the network in some way, there will always be more good than bad crypto miners - in the long run bad lose sooner or later.

[cr1776]

In addition to what others have said, it is also useful to remember that there aren't any exponential hash leaps available.  The ones from CPU to GPU to FPGA to ASIC mining each obsoleted previous generations reasonably quickly.  Now chips may go from 10nm to 5 or something but while that will increase the hash rate, it won't increase it by a factor of 10 or 100 or more as it did previously.

To me that means that it will make it much more likely that while mining farms do have economies of scale and power deals, this makes it more likely that someone with solar or hydro power might buy a miner and pick a pool that does not censor.  Distribution of hash power like it was with CPU, GPU, FPGA, and even early ASIC miners is key so that mining pools that do not operating with the primary goal of maximizing profits will lose miners to pools that do.

p2pool, despite a few issues, was an important pool at the time.  Who knows, perhaps sometime in the future too.

[DooMAD]

Either through ideology, greed, or a healthy mix of the two, I honestly don't see a whole bunch of pools going along with this.  It's not a pool's long term interests to undermine one of Bitcoin's fundamental tenets and it's not in their short term interests to give up the transactions fees they could be collecting.