OFAC-Sanctioned Transactions Being Censored

[Artemis3]

In summary, the report concludes that these transactions were likely intentionally filtered by F2Pool, This raises the question of why F2Pool, a pool with origins in Asia, is the first pool to filter transactions based on US OFAC sanctions, especially considering that other transactions with similar or lower fee rates were included

And in typical American fashion, American companies may be given a no-gag order, obey quietly or else...
So you can just choose what State will enforce their rules, depending on where the pool is.

Unless some pool starts operating in the "dark web" (tor hidden/i2p, etc) or such, with anonymous use like ckpool does for solo. But what if those operators do a rug pull? It happened in the past in the clear net...

Maybe a REAL pool operated in El Salvador or some country favorable to Bitcoin? (not a whitelabel from yet another American company).

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[alani123]

In summary, the report concludes that these transactions were likely intentionally filtered by F2Pool, This raises the question of why F2Pool, a pool with origins in Asia, is the first pool to filter transactions based on US OFAC sanctions, especially considering that other transactions with similar or lower fee rates were included

And in typical American fashion, American companies may be given a no-gag order, obey quietly or else...
So you can just choose what State will enforce their rules, depending on where the pool is.

Unless some pool starts operating in the "dark web" (tor hidden/i2p, etc) or such, with anonymous use like ckpool does for solo. But what if those operators do a rug pull? It happened in the past in the clear net...

Maybe a REAL pool operated in El Salvador or some country favorable to Bitcoin? (not a whitelabel from yet another American company).

Funnily enough most OFAC sancitoned transactions that were dropped by F2POOl were mined by the Foundry Digital. The private close ended pool that runs exclusively for an alliance of north American miners that are to a large extent U.S. public companies. I guess this is just by chance mostly since these guys are the biggest pool lately, but it goes to show that at least for now, FEDs haven't cared to force any miner's hand at enforcing their censorship list on miners and mining pools for bitcoin.

Although it's a very real possibility, I don't think the laundering happening through bitcoin is significant enough to warrant the government's attention to that extent. They'd waste too many resources and anger a community that's quite big so they've probably purposely avoided this. Or they've just not gotten around this yet. Probably good idea to not have good faith towards FEDs.

[DaveF]

In summary, the report concludes that these transactions were likely intentionally filtered by F2Pool, This raises the question of why F2Pool, a pool with origins in Asia, is the first pool to filter transactions based on US OFAC sanctions, especially considering that other transactions with similar or lower fee rates were included

And in typical American fashion, American companies may be given a no-gag order, obey quietly or else...
So you can just choose what State will enforce their rules, depending on where the pool is.

Unless some pool starts operating in the "dark web" (tor hidden/i2p, etc) or such, with anonymous use like ckpool does for solo. But what if those operators do a rug pull? It happened in the past in the clear net...

Maybe a REAL pool operated in El Salvador or some country favorable to Bitcoin? (not a whitelabel from yet another American company).

Funnily enough most OFAC sancitoned transactions that were dropped by F2POOl were mined by the Foundry Digital. The private close ended pool that runs exclusively for an alliance of north American miners that are to a large extent U.S. public companies. I guess this is just by chance mostly since these guys are the biggest pool lately, but it goes to show that at least for now, FEDs haven't cared to force any miner's hand at enforcing their censorship list on miners and mining pools for bitcoin.

Although it's a very real possibility, I don't think the laundering happening through bitcoin is significant enough to warrant the government's attention to that extent. They'd waste too many resources and anger a community that's quite big so they've probably purposely avoided this. Or they've just not gotten around this yet. Probably good idea to not have good faith towards FEDs.

Which goes back to what I said that pools are business run by people. Their opinions of what to mine may or may not mesh up with yours.

Example, a lot of people here give Foundry a hard time, the operators get annoyed and start to not mine TXs form people whos addresses are public here. (sig campaigns, sales of things, and so on) It's their right, it's their pool. We have no say in it. No government, no OFAC, just FU to Bitcointalk users. The true free enterprise open market people would say 'good it's a private business they can do what they want' the true libertarians would say  'good it's a private business they can do what they want'.

But I have a strong suspicion that a lot of people would come here and cry 'wah wah wah the mean old pool operator is not mining our TXs'

-Dave

[stompix]

Example, a lot of people here give Foundry a hard time, the operators get annoyed and start to not mine TXs form people whos addresses are public here. (sig campaigns, sales of things, and so on) It's their right, it's their pool. We have no say in it. No government, no OFAC, just FU to Bitcointalk users. The true free enterprise open market people would say 'good it's a private business they can do what they want' the true libertarians would say  'good it's a private business they can do what they want'.

But I have a strong suspicion that a lot of people would come here and cry 'wah wah wah the mean old pool operator is not mining our TXs'

-Dave

There will be some users who are going to say the following:
-You don't like it, make your own coin!
And fully understandable, when some send other people to use altcoins because you believe in decentralization and you must keep nodes running on two decades old computers on dial-up, it's perfectly understandable to go and create your own coin that doesn't need 10billion and 10Gw of power for protection. 

And it doesn't stop here, how ironic, some talk about blacklisting ordinals, but are enraged by somebody else blacklisting their tx. Gold!
Or:
https://bitcointalk.org/index.php?topic=150405.0

Let's show them how the free market works and that not only miners have a say on this subject!

[DooMAD]

And it doesn't stop here, how ironic, some talk about blacklisting ordinals, but are enraged by somebody else blacklisting their tx. Gold!

It is a peculiar double standard, isn't it?  If someone is opposed to OFAC-sanctioned censorship and also opposed to Ordinals, how would they react if someone tried creating an Ordinal using an OFAC-sanctioned address and it was blocked?

Hell of a grey area such people could find themselves in, heh.

[o_e_l_e_o]

Example, a lot of people here give Foundry a hard time, the operators get annoyed and start to not mine TXs form people whos addresses are public here. (sig campaigns, sales of things, and so on) It's their right, it's their pool. We have no say in it. No government, no OFAC, just FU to Bitcointalk users. The true free enterprise open market people would say 'good it's a private business they can do what they want' the true libertarians would say  'good it's a private business they can do what they want'.

So, are we now agreeing that bitcoin is in fact not censorship resistant at all, and depends on trusted third parties (mining pools) in order for anyone to use it?

There will be some users who are going to say the following:
-You don't like it, make your own coin!

Don't need to make your own coin, just use Monero. It is impossible to perform this kind of attack on Monero.

Hell of a grey area such people could find themselves in, heh.

For what its worth, I don't think ordinals should be censored either, regardless of how stupid I think they are:

I have been one of the most vocal opponents of NFTs and other such worthless crap. However, who am I to say that someone else's use case of bitcoin is wrong, and preventing them from using bitcoin in this way? What's to stop someone else coming out and saying that my use case of bitcoin is wrong, and trying to do the same thing to me?

When did free speech and freedom from censorship become the fringe view among the bitcoin community? It's quite disturbing.

[BlackHatCoiner]

Governments want to censor bitcoin (alas), and there appears to be a mining pool which complies with that. While truly sad for the chairmen of that business, Bitcoin is censorship resistant. The game theory is still on run. They are only harming their pockets. Even in an extreme scenario where most of the hash rate is pro-censorship, there will still be a few pools which will not censor. Those will be enough for any transaction to be confirmed.

It wouldn't surprise me if this brilliant idea was proposed by an incompetent politician.

[o_e_l_e_o]

Even in an extreme scenario where most of the hash rate is pro-censorship, there will still be a few pools which will not censor.

And in such a scenario, the pro-censorship majority can simply ignore any blocks which include transactions they dislike. Any blocks mined by the non-censoring pools can just be re-orged out of the chain at will.

As it turns out, bitcoin is not censorship resistant. It simply isn't being censored right now.

[BlackHatCoiner]

And in such a scenario, the pro-censorship majority can simply ignore any blocks which include transactions they dislike. Any blocks mined by the non-censoring pools can just be re-orged out of the chain at will.

That'd be the time to abandon Bitcoin for good. The day mining pools reorg the chain is the day there is nothing valuable to secure. It'd be suicidal.

[SamReomo]

Even in an extreme scenario where most of the hash rate is pro-censorship, there will still be a few pools which will not censor.

And in such a scenario, the pro-censorship majority can simply ignore any blocks which include transactions they dislike. Any blocks mined by the non-censoring pools can just be re-orged out of the chain at will.

As it turns out, bitcoin is not censorship resistant. It simply isn't being censored right now.

I have gone through each post of the thread and I agree with you that Bitcoin isn't censorship resistant and maybe in future those people who want to make Bitcoin centralized will be successful at doing that. The pools are backed by the miners who just want to earn money from mining and that's the unfortunate thing which no one can change. If pools allow  miners to pay low-fees then the miners will blindly join those pools that allow them to earn their mining profits without sharing much percentage with the pools, but they don't know that on the basis of their mining power the pools can do many things with the transactions.

I know that in present days Bitcoin is still not in their control fully but surely when they have a lot of hash power and with that 51% attack they may get the power to decide what to do with the transactions that they don't like. Even, in the current situation that pool blacklisted those transactions doesn't have that 51% hash power to control the whole network but still they can blacklist the transactions or addresses they don't want and that's a sign that they have control over the network to some extent already. I hope that they won't gain complete control over it as that would be a huge threat to privacy as that would impact the decentralized nature of Bitcoin.

[DaveF]

Even in an extreme scenario where most of the hash rate is pro-censorship, there will still be a few pools which will not censor.

And in such a scenario, the pro-censorship majority can simply ignore any blocks which include transactions they dislike. Any blocks mined by the non-censoring pools can just be re-orged out of the chain at will.

As it turns out, bitcoin is not censorship resistant. It simply isn't being censored right now.

If that happened I could see 2 things happening.
1) A fork war.
2) BTC loosing all it's value and it not mattering who mined what anyway since nobody would be using it anymore.

No pool would really want to do that because they would probably see the same things and know that it would kill their business.

-Dave

[HmmMAA]

No pool would really want to do that because they would probably see the same things and know that it would kill their business.

-Dave

Don't forget that there are chains with a different mindset than the one of btc community that will welcome those pools and hashrate .

[PrivacyG]

If Bitcoin in fact does become censored then is it possible for us to return to CPU Mining?  Back when Bitcoin was created this was the norm.  Right?  1 CPU equals 1 vote.  It was supposed to be like this so every body has a right to vote.  Now we get warehouses of GPUs used for Mining.  There is no more such thing as 'every body gets a right to vote' because others have way too many votes.

If these warehouses start censoring.  How about we just go back to what Bitcoin was and return to CPU mining?  This renders ALL censoring warehouses useless for Bitcoin Mining and gives us all back the power.

Is there any danger I do not see?

[alani123]

Which goes back to what I said that pools are business run by people. Their opinions of what to mine may or may not mesh up with yours.

Example, a lot of people here give Foundry a hard time, the operators get annoyed and start to not mine TXs form people whos addresses are public here. (sig campaigns, sales of things, and so on) It's their right, it's their pool. We have no say in it. No government, no OFAC, just FU to Bitcointalk users. The true free enterprise open market people would say 'good it's a private business they can do what they want' the true libertarians would say  'good it's a private business they can do what they want'.

But I have a strong suspicion that a lot of people would come here and cry 'wah wah wah the mean old pool operator is not mining our TXs'

-Dave

I think that this we've gotten into actually identifying one of the weaknesses of libertarianism.
Libertarians don't particularly like organizations that exercise authority or hold power.
But what happens when someone hurts you in some manner? You could straight up ignore, but sometimes at risk of great losses.
Some libertarians might like to call this a violation of the Non Aggression Principle but... Who gets to enforce the repercussions and how?

In the scenario that miners chose to block certain addresses from ever confirming transactions, it might be their choice, but why should we simply respect it if it infringes upon us?
In that case, it would be better to have established some sort of organization to be able to in a way punish the bad faith miners by responding accordingly in a timely manner.
This organization would have to function under a certain framework in order to avoid having to much power over others, and would have to exist pro-actively, instead of being formed after issues arise.
The pro-active organization's mere existence could act as a deterrent to bad-faith actors, but it would surely be a good measure to have in place if anything bad actually happens.

So there we go. Authority and organization are sometimes meaningful. Likewise today, certain bitcoin Core developers are the absolute authority to how Bitcoin Improvement Proposals are passed into the discussion phase. But if it weren't for them, many more people would have to be dragged into bureaucratic procedures as to whether or not even we should open a discussion that the vast majority of the community would consider stupid anyway.

[In reality this time though, the miners this time saw the value in their brand image towards the public and just backed out of filtering transactions (for now at least). So there's also non-coercive means to work with at the first stages of trying to achieve something.]

But on that note, with the freedom of being able to exclude transactions, also comes some responsibility that bad faith authorities like the OFAC might want to impose on bitcoin miners. So the idea of cloaking transactions before confirmation just so miners can't see what they're confirming might be a good idea after all. No possibility to pick and choose means reduced liability also.

[Poker Player]

So, are we now agreeing that bitcoin is in fact not censorship resistant at all, and depends on trusted third parties (mining pools) in order for anyone to use it?

As it turns out, bitcoin is not censorship resistant. It simply isn't being censored right now.

And in such a scenario, the pro-censorship majority can simply ignore any blocks which include transactions they dislike. Any blocks mined by the non-censoring pools can just be re-orged out of the chain at will.

That'd be the time to abandon Bitcoin for good. The day mining pools reorg the chain is the day there is nothing valuable to secure. It'd be suicidal.

What a bummer, I'm not optimistic about it, but seeing you say that, along with the stompix popcorn, makes me even more pessimistic.

If Bitcoin in fact does become censored then is it possible for us to return to CPU Mining?  Back when Bitcoin was created this was the norm.  Right?  1 CPU equals 1 vote.  It was supposed to be like this so every body has a right to vote.  Now we get warehouses of GPUs used for Mining.  There is no more such thing as 'every body gets a right to vote' because others have way too many votes.

If these warehouses start censoring.  How about we just go back to what Bitcoin was and return to CPU mining?  This renders ALL censoring warehouses useless for Bitcoin Mining and gives us all back the power.

Is there any danger I do not see?

With the current hashrate you can not, I think that could only be possible in the hypothetical scenario they are painting in which a majority of miners begin to censor transactions and a few others do not, so there would be a fork that would have much less hashrate and then maybe the scenario you speak about would happen but it does not seem a very rosy future, and I do not have much technical knowledge, someone correct me or clarify if it is not entirely correct what I say.

[o_e_l_e_o]

That'd be the time to abandon Bitcoin for good. The day mining pools reorg the chain is the day there is nothing valuable to secure. It'd be suicidal.

No pool would really want to do that because they would probably see the same things and know that it would kill their business.

Would it, though? That'll be the day the likes of us abandon bitcoin, but the masses don't care. They let centralized exchanges act as banks, surveil their every move, hold their coins, and dictate how they can spend them. They use custodial wallets which can stop serving them at any time, like Wallet of Satoshi just did. All they care about is "when moon", and not at all about the whole point of bitcoin in the first place. They cheer for more regulations since it means bitcoin "is going mainstream", and eagerly await institutional investors, ETFs, and the like. Are they going to care about a few transactions belonging to other people are being censored? The fact that this censorship is barely being discussed across this forum/Reddit/Twitter/etc. tells you all you need to know. People don't care.

In that case, it would be better to have established some sort of organization to be able to in a way punish the bad faith miners by responding accordingly in a timely manner.

So a centralized third party to police the other centralized third parties? No thanks. What we need is more privacy by default on the base layer to make this kind of censorship impossible to begin with.

[digaran]

Whether you exclude transactions or include dust spam over and over, both are considered attack on Bitcoin, the dude is too young to understand this is a game to him out of the competition. What can we do, survival of the fittest, right?

[cryptosize]

No pool would really want to do that because they would probably see the same things and know that it would kill their business.

-Dave

Don't forget that there are chains with a different mindset than the one of btc community that will welcome those pools and hashrate .

BSV is not censorship resistant:

https://twitter.com/BobSummerwill/status/1577714409618931713
https://github.com/bitcoin-sv/bitcoin-sv/releases/tag/v1.0.13

Who will migrate to a shitcoin under Faketoshi's leadership?

What we need is more privacy by default on the base layer to make this kind of censorship impossible to begin with.

You know that's impossible without a hard fork, right?

People might migrate to Monero, but it has totally different tokenomics (due to tail emission).

[Z-tight]

But on that note, with the freedom of being able to exclude transactions, also comes some responsibility that bad faith authorities like the OFAC might want to impose on bitcoin miners.

I expect mining pools to understand the ethics and principles of the BTC network, it is true that mining is a 'business' and miners want to make profit, but sanctioning tx's defeats the principles and ethics of the network and it also doesn't help them in the case of making profit, because they are rejecting the tx fees attached to those tx's. The authorities cannot 'impose' anything on miners, because pools have the 'right' to oppose any policy that affects the nature of the BTC network, and if the conditions because so unfavorable, it is better miners relocate or pack up their gears from such locations, than for them to directly 'attack' the BTC network.

So the idea of cloaking transactions before confirmation just so miners can't see what they're confirming might be a good idea after all. No possibility to pick and choose means reduced liability also.

That is not possible, the BTC blockchain is both a public and transparent ledger, everything is open to everyone and even if this was possible, i would not support it.

[o_e_l_e_o]

You know that's impossible without a hard fork, right?

What's the alternative? We sit around, shake our fists, do nothing, wait for more mining pools to capitulate to government demands, and then lament that bitcoin is under government control?