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Could centralisation of miners lead to censorship?

Bitcoin Stack Exchange

Bitcoin News / Bitcoin Stack Exchange 147 Views

I will try to combine both answers by Hugo Franklin and David Schwartz with my thought process in the hope that this could add value to others.

The scenario of geographically centralized Bitcoin miners that are censoring transactions is one that is unrealistic for a multitude of reasons.

Bitcoin mining is permissionless so anyone can participate, i.e. compete. Not only that, but there is lots of energy that is not being used due to expensive transportation which Bitcoin does not need. Effectively not only can anyone compete, but there are many people and places for whom it will always be worth it to compete.

So it's already unlikely that this part of the scenario would happen but suppose it did.

Any attempts at censorship would lead to the censored addresses paying higher transaction fees to incentivise miners to include their transaction. So effectively the more you censor, the more competition you invite. This makes the success of the censorship even less likely.

Summarised: The permissionless nature implies that centralization of the mining would be extremely difficult to achieve, once achieved it would once again be virtually impossible to continually enforce censorship, which, in the case it somehow still does work out, would be entirely self destructive.


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