At a small Princeton event last week, among other panels and speeches, Carole House spoke about censoring bitcoin.
She is the former director of cybersecurity for the White House National Security Co...
- Miners will leave the country or shut down if they are banned from including too many profitable transactions.
- Miners who attempt to comply will constantly be at risk from people who aren't completely stupid sneaking their 'banned' transactions in to blocks. They could easily end up in the position where they are unable to build on the main chain at all, either due to too many 'banned' transactions or too much legal risk.
- The people who want to make 'banned' transactions will have an incentive to provide their own hashing power to make them. This could include government operated miners.
- There are already strong incentives to improve Bitcoin privacy. This will significantly increase them. There is effectively a trade-off between censorship and transaction transparency. In the extreme case, Bitcoin will be forced to become a privacy coin. The technology already exists. It hasn't been implemented yet because the incentives aren't strong enough.
I kind of want them to try this. Short term, it would be chaos, but long term, it would be fantastic for the value of Bitcoin.
- Miners who attempt to comply will constantly be at risk from people who aren't completely stupid sneaking their 'banned' transactions in to blocks. They could easily end up in the position where they are unable to build on the main chain at all, either due to too many 'banned' transactions or too much legal risk.
- The people who want to make 'banned' transactions will have an incentive to provide their own hashing power to make them. This could include government operated miners.
- There are already strong incentives to improve Bitcoin privacy. This will significantly increase them. There is effectively a trade-off between censorship and transaction transparency. In the extreme case, Bitcoin will be forced to become a privacy coin. The technology already exists. It hasn't been implemented yet because the incentives aren't strong enough.
I kind of want them to try this. Short term, it would be chaos, but long term, it would be fantastic for the value of Bitcoin.
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