Bitcoin Mining Pool (BTC) Censorship of Transactions – Why Is It Serious?

A Blockseer mining pool announced that it would only mine blocks containing „clean“ transactions, coming from unblacked wallets. Why is this so problematic?

Mining pool censors Bitcoin (BTC) transactions

DMG Blockchain Solutions, the parent company that manages Blockseer, recently announced the change . She explains in a statement that all users will be forced to submit to KYC measures . So far this is not abnormal for a mining pool. But where Blockseer goes further is that it explains that only certain blocks will be validated . The press release states:

„Blocks products on blockchain Bitcoin by e pool of mining Blockseer only contain the filtered transactions , which will make use of data and Blockseer Walletscore in parallel with verified sources like the blacklist of the Office of Foreign American Assets Control (OFAC). “

This therefore means that the mining pool will only take into account transactions from wallets that are not blacklisted or not reported . Blockseer welcomes what he sees as a breakthrough, explaining:

“Blockseer’s new mining pool will be the first pool in North America that will meet OFAC’s expectations, and even exceed them in terms of compliance for BTC addresses. “

Why is this censorship problematic?

Although it concerns only a mining pool, the news has been 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. This is for example the opinion of Ricardo Spagni, one of the main developers of Monero (XMR), who explained :

“It’s only a matter of time before all Bitcoin mining pools are forced to filter transactions . “

Juraj Bednar, the co-founder of Hacktrophy, also provided some 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 explains that governments could ask mining pools not to take into account certain transactions, under penalty of losing their bank account, their authorization as a company, or even threatening 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 .