A Blockseer mining pool announced that it would only mine blocks containing “clean” transactions from non-blacklisted wallets.
Why is this so problematic?
A Bitcoin (BTC) mining pool is censoring transactions – Why is this serious?
A mining pool censors Bitcoin (BTC) transactions.
DMG Blockchain Solutions, the parent company managing Blockseer, recently announced this change. It explains in a press release that all users will be required to undergo KYC measurements. So far, this is not unusual for a mining pool. But where Blockseer goes further is that it explains that only certain blocks will be validated. The press release specifies as follows:
“The blocks produced on the Bitcoin Evolution blockchain by Blockseer’s mining pool will only contain filtered transactions, which will make use of data from Blockseer and Walletscore, in parallel with verified sources such as the US Office of Foreign Assets Control (OFAC) blacklist. »
This means that the mining pool will only take into account transactions from non-blacklisted or unreported wallets. Blockseer welcomes what it sees as a step forward, explaining :
“Blockseer’s new mining pool will be the first pool in North America that will meet and exceed OFAC’s expectations for BTC address compliance. »
Why is this censorship problematic?
Although it only concerns a mining pool, the news was noted within the crypto ecosystem because it could set a precedent. Indeed, it could be used by regulators to force other mining pools to censor blocks. For example, Ricardo Spagni, one of the main developers of Monero (XMR), said :
“It is only a matter of time before all Bitcoin mining pools are forced to filter transactions. »
Juraj Bednar, the co-founder of Hacktrophy, also gave an analysis in a blog post. He explains :
“If governments or anti-money laundering organizations want to censor Bitcoin, this is really the first step. »
Bednar thus explains that governments could ask mining pools to disregard certain transactions or risk losing their bank account, their authorization as a company, or even threaten them with legal action. The slope is therefore particularly slippery, and it could lead to a situation that would threaten one of the pillars of Bitcoin: its resistance to censorship.
Pour go further: What if governments decided to ban Bitcoin (BTC)?
What will the miners of Bitcoin (BTC) do?
Because mining pools are by nature highly centralized, they are also more likely to be censored. However, the use of decentralized mining pools, or privacy options, could help avoid this pitfall.
However, this raises the question of profitability, which still governs miners. Will they be willing to potentially lose revenue to preserve Bitcoin’s resistance to censorship? Or will profitability drive them to comply with future regulatory expectations?
The history of cryptomoney shows that miners often go where the money is. For now, this scenario remains hypothetical, but if in the coming months and years other mining pools also make this choice, the question could arise for all users.