Topic: Has a Bitcoin Transaction ever been censored? - page 2. (Read 425 times)

This concept is very important and it is the way I envisioned the current Bitcoin ecosystem worked.  I believed that the only time an Exchange like Binance would reject my Bitcoin was if I was charged with a serious crime.  Since I don't see criminal behavior as applicable to me or my friends,  I wasn't concerned who I received Bitcoin from.

Traders won't care, but I'm sure exchanges run some kind of taint analysis on all coins they keep. They decide whether the coins are tainted or not, and can deny you their service on those grounds.

The good thing about this is that their analysis is mostly sophisticated enough to recognize that you just happened to find dirty coins on your hands, meaning you're very unlikely to get banned unless you're actually doing something shady. The bad thing is that they also have a very good idea of where your money is coming from and what you're doing with it, so you actually have very little privacy if you're using such a service.

If you're using Bitcoin P2P, which is how it was originally intended to be used, it can't be "censored".

IIRC, yes. They will send an email to tell you that they're closing your account and for you to withdraw.
I would say that what the services are postulating for the closure of accounts is toxic for the development of Bitcoin. That is also the reason why  I prefer having zero central authority when dealing with stuff like that. Some point in the future, most of the coins would've been tainted and it would only serve as alternate reasons for the exchange to avoid dealing with you. Until the regulatory pressure on Bitcoin eases, I doubt this would stop happening for major exchanges.

The question now is who decided which coins is tainted? Not bitcoin enthusiast (traders/investors), not exchanges. So this is a bad idea in my opinion. Can someone received a coin from Mt. Gox hack and never realized it? Definitely, that it mean that you are a criminal? I don't think so.

This is a good argument for having multiple implementations of the Bitcoin Protocol.


Does Binance return the Bitcoin to the Sender before they close the account?

I am coming at this question from the angle of how I discuss and promote Bitcoin to my friends.  Based on the responses, I feel safe to still claim that you are your own Bank with Bitcoin.   As long as you control your Private Key you can send any amount of Bitcoin to anyone.  The caveat, however, is that if the Bitcoin you own is somehow "tainted", it may be rejected at Exchanges or other points of Centralization.

It's similar to if my friend is paid in counterfeit dollar notes but doesn't know it and then goes to the Bank to deposit the notes but the Bank rejects and possibly confiscates them.

I'll be honest this issue of fungibility takes some air out of the Bitcoin narrative.  Prior to today I promoted Bitcoin as "You control your Bitcoin and no one can stop you from sending it to someone else."

I have to be more careful with my narrative now. The narrative now has changed to "You control your Bitcoin and no one can stop you from sending it to someone else.  However, it's possible that an exchange or other central authority may reject your Bitcoin if it is tainted.  Ensure that you only transact with trusted parties."

It was more of an issue in ~2013-ish when on-chain gambling was more prevalent. Agreed, it would not make sense for the miners economically. Barring the miners collectively having the same agenda (unlikely) or a 51% attack (very unlikely), I can't see censorship being implemented effectively besides perhaps a minor inconvenience from certain miners refusing to mine some transactions.

I tend to agree, unless if someone will decode the Bitcoin protocol network that originally built by the creator. It's decentralized and it should be censorship resistance. Bitcoin should be, transparent, immutable protocol code, and the last one is censorship resistance that everyone's could see and replayed on the blockchain, you can't completely hide information from others because it should be recorded by blockchain that can able to distributed ledger which means everyone can run with internet connections.

Probably there is censorship as comment above, but that is not on actual transactions. This is what on the third party that own by Bitcoin, example custodial wallet didn't accept Bitcoin that comes from gambling or Bitcoin address that marked as a scam by scam Bitcoin monitoring addresses service like Chainalysis.

in a decentralized network nothing can be censored at all as long as that network remains decentralized. bitcoin network is completely decentralized as it has always been and in order to censor a transaction we must first see 100% centralization before it becomes possible.

the centralized world however can do whatever they want, as they have also done censorship in the past and are still doing it. for example when the centralized exchanges shut down an account or don't credit a deposit for weird reasons, that is a form of censorship.
but this has nothing to do with bitcoin itself.

No, he says if you send a transaction you can be blocked.
It simply means that once you make a transaction, which implies the ability to send and receive, you as a person can be refused service by a third party, and this, unfortunately, happens quite often, although a lot of times is used just as an excuse to fleece the users.


It wasn't at that time as the chain was never really clogged with transactions, the average block size was below 500kb before 2016 so it was not really affecting anything, but right now, the refusal of some pools to mine certain transactions would be far more effective and it will cost the ones on the blacklist a lot more to send and receive money as cheaper transactions will take your place in some blocks.

But the dangers of miners trying to censor transactions will go down with each reward halving, soon they will not afford to not include some transactions and let the competitors earn more.

I experienced it first hand, not pretty. Wasted nearly 3 weeks on two failed attempts because one came from Freebitcoin and the other from a gambling site. And those were for withdrawing from the custodian wallet.

I think that you have misunderstood it.
The network doesn't care about the source of money. 99% sure the miners also don't care.
The recipient of the money, a company, may however do censoring. That's the "beauty" of custodian wallets  

If you do a search for account closed gambling wallet site:bitcointalk.org you'll find that some exchanges / wallets may not allow money coming from gambling.
Also the wallets known to be related to known hacks are being watched and most exchanges may seize those coins.


I think that this is the censoring Charlie Lee was talking about, not about actual transactions.

I'm a little difficult to understand what you mean "Bitcoin transactions on censorship".

I don't know what you mean 'censorship'.

However, maybe the topics below can help you to find the answer.
Try reading the topic below.

Topic: The Bitcoin Origins - Explore Bitcoin History and Secrets

Topic: The History Of Bitcoin!

If your question, is in the topic please let me know.

Depends on what you mean by censored.

There was once a patch on Bitcoin Core that could be used to filter and refuse to mine known gambling addresses (those of satoshidice and on-chain gambling). This wasn't particularly effective as a lot of miners and users didn't run this.

Exchanges has been and are still closing accounts if the origins of the coin has been tainted (either through a gambling site or illicit activities). They are still actively doing so, Binance and Coinbase are good examples.

Miners ultimately decide which transactions should be included. If they want, they can collectively refuse to mine certain coins though that has never been the case.

In the below video at 33:42 min Charlie Lee says that Litecoin (and Bitcoin) can be censored if the Litecoin was previously used in illicit activity.

https://www.youtube.com/watch?v=C_pTOomVtI8

Were there any Bitcoin transactions that were actually censored in the history of Bitcoin?

Thank you