BlockSeer, a blockchain analytics platform, has recently launched the private beta version of its new Bitcoin mining pool. What makes this mining pool, aptly named Blockseer Mining Pool, stand out over the rest is its ability to censor transactions being made from blacklisted wallets.
New Means Of Keeping Blacklisted Transactions Under Control
This pool will leverage the labeling data of both Walletscore, BlockSeer, the US Office of Foreign Assets Control, and other verified sources to gain an expansive blacklist for cryptocurrencies. Through this, the pool will be able to identify transactions that it will refuse to process. All miners within this mining pool are also mandated to pass strict Know-Your-Customer (KYC) protocols.
Shelden Bennett stands as the COO of DMG, and gave a statement about the matter at large. He explained that this pool prioritizes avoiding doing transactions being requested from wallets known as being used for malicious purposes.
Bennett stated that the actors behind these wallets “sully” cryptocurrencies’ reputation through the use of this medium, with Bitcoin being the most popular. Through this damage to reputation, Benett states that it impedes widespread adoption and sullies its mainstream reputation.
Warnings Of Future Implications
Riccardo Spagni stands as the former developer of Monero, known in that space as fluffypony. He made a suggestion on Twitter, warning that this could serve as a slippery slope for the crypto space.
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.
— Riccardo Spagni (@fluffypony) November 11, 2020
Transaction censorship was something he speculated could potentially become widespread primarily thanks to regulatory pressures. The concern Spagni had was that regulators could start thinking this is a good idea when it comes to extreme cases, such as the OFAC crypto list. From there, it’s a simple matter of enforcing it into laws.
Some Possible Solutions
In order to prevent this, Spagni suggested increasing the privacy of Bitcoin, highlighting things like Stratum v2 and p2pool that would make such censoring completely unenforceable. In his opinion, he’d rely on those measures as opposed to hopes and prayers
Established in 2011, p2pool stands as a decentralized BTC mining pol, while the Stratum V2 draft was made by Braiins. Stratum V2 stands as a complete overhaul, implementing the BetterHash secondary protocol that allows the mining pool constituents to make decisions regarding the mined block’s composition. With this, pool censorship would be rendered impossible.
While it still needs a formal review, as shown by Jan Capek, the co-founder of Braiins, Stratum V2 has already received grants from Square Crypto in order to further its development.