Topic: OFAC-Sanctioned Transactions Being Censored (Read 2244 times)

If anybody needs an OFAC lawyer, here's how to choose one: https://www.jdsupra.com/legalnews/the-most-important-thing-to-keep-in-2214564/

Not really since it's been proven pointless.
Some pools will not confirm transactions that they don't like.
And then in the next few blocks if not the next block some pool that does not care will confirm them.

Be it because they are on some list or like Ocean that does not confirm ordinals if they don't want to: https://bitcointalksearch.org/topic/m.63250909
Any pool is free to include or not include what they want in blocks. So, no there is no censoring, just a delay in getting some transactions confirmed.

-Dave

Sorry for reviving this topic. Anything new on this matter?

Yes. That's why I've pointed out this would be a subject of constant debate within the community. Either allow Ordinals on-chain and OFAC-sanctioned transactions or all the other way around. As much as I hate high fees, there's nothing we can do other than wait until the hype is over. Rejecting Ordinals just because they increase network congestion, is not a good idea.

Ultimately, the community will decide what's best for Bitcoin in the long run. I only hope BTC stays decentralized and censorship-resistant to prove itself a viable alternative against Fiat. Otherwise, it would be the end of an era for financial freedom and privacy. The future is unpredictable, so lets hope for the best. 

HmmMAA is a butthurt BSV fanatic/big blocker, don't mind him...

mining pools in early 2011+ were just brands of software services,

however recently. mining pools are registering as financial businesses, by which regulations then apply

developers are enhancing/upgrading "stratum" software to allow 'workers'(asic owners) to use their home bitcoind to make a full blocktemplate and transaction list separate from a mining pool so that it takes the requirement of transaction selection out of pool managers hands,

You just need to look at the court case of Roman Sterlingov for proof of how completely unreliable they are. Chainalysis had to admit under oath that they have absolutely zero scientific process underlying any of their methods, that they have absolutely zero proof that any of their methods work as advertised, and they have no data at all on how many false positives they generate. In other words, the entire thing is little more than guesswork.

So in summary - censorship you agree with should be allowed, but censorship you don't agree with should be banned.

Can you not see how this is a problematic statement to make? Bitcoin is either censorship resistant, or it isn't. Allowing some censorship that some users think is ok opens the door to any and all censorship.

Damn , that satoshi dude is such a braindead ignorant , he should have ask advise from cryptosize how network should be coded . If we consider that cryptosize knew about bitcoin since 2003 it was a great opportunity to have a network as the mastermind wants it to be .
What a clown .

Haven't you heard about UAHFs (User Activated Hard Forks)? Users & node operators can unanimously agree to censor Ordinals inscriptions even if miners don't like it. After all, they don't posess full control over the BTC blockchain. Once there's a supermajority of network nodes running software with the filter, Ordinals will be gone for good. I know this goes against Bitcoin's censorship-resistant principles, but it's for the best if we want low fees again.

OFAC-sanctioned transactions, on the other hand, are another story. Miners shouldn't censor these transactions just because the US government wants to. Isn't the whole idea to make Bitcoin an independent monetary system from banks and governments alike (no middlemen)? We've entered uncharted territory, so either BTC remains a censorship-resistant cryptocurrency or all the other way around. The future is widely unpredictable, so we can only hope for the best.

Arguably, it's both.  It was done with the intent of censoring ordinals and it was poorly implemented.  Bad coding and bad principles in equal measure.

But in a way, this misstep is a natural part of progress and how we move forward.  This not only serves as a prime example of how not to do things, but also clearly illustrates how fine the line is and how easy it is to cross if we're not vigilant.  Hopefully people will realise the error of this approach and not make such mistakes again.  This is what happens when you try to meddle in the natural order of things. 

Those who try to act as arbiter and gatekeeper will, sooner or later, inevitably deny access to the wrong party by mistake.

I urge everyone to learn from this.

Yes, it is possible to taint banknotes either by putting invisible ink on them or having their serial numbers treated specially when they are used at certain financial institutions.
It is easy for the government to check if a banknote is tainted but it is very difficult to get a list of people who own tainted banknotes. Tainted banknotes serve well when the police needs to catch someone taking bribes, but when they circulate in the society it is very difficult to find the path of a tainted banknote.

With government-controlled electronic money (bank money used in credit/debit cards and CBDCs)  they don't even need to specially taint anything. All transactions are visible to the government.

So we can say that the banknote anonymity is not perfect but it is quite good compared to that of the government-controlled electronic money.

The tainting provided by the various "chainalysis" companies does not work perfectly because transactions have multiple inputs and outputs and that is why these companies return a probability score instead of a true/false flag. I am skeptic of their reliability, but putting aside that, the real problem is the KYC. It is similar to writing a report to the government each time when you buy something at the corner store or lend $100 to your friend.

The European Commission works relentlessly on turning the EU into a totalitarian state, so I wouldn't  be surprised if sooner or later they introduce banknotes with RFID chips. But this kind of "cash" will have very little in common with the real cash that we use now.

The problem is how much influence this decision has on other mining pools and individuals. Let me explain... Jack Dorsey and Luke have always been very influential in the Bitcoin ecosystem. This move is definitely wrong if you consider the basic purpose of Bitcoin. It gives the impression that governments can apply their own rules if they have  the ability to infiltrate inside mining pools. I don't imply that this is what happened here, but I do think that governments will like it because they will see potential behind it. Potential to exploit hash power to achieve their goal. Which is to censor traffic on the Bitcoin network.

This is the direct continuation of the initial topic opened by the OP.

I bet Uncle Sam is holding Jack by the balls so he decided to make up some vague technical reason why they can't  process coinjoin transactions. Probably a call from some 3 letter agency saying "stop processing these transactions or we'll stop you". 

IMHO, it was a mistake on Satoshi's part designing Bitcoin is such a way to also include arbitrary data (i.e. the bank bailout message), not just financial transactions.

If I had it my way, BTC's blockchain would store ONLY financial transactions (this is possible with Mimblewimble which makes the blockchain very lightweight, i.e. BEAM, GRIN) and there would be a separate, optional blockchain (sidechain if you will) to store text messages, photos, audio files, videos (even DVD movies) etc.

Unfortunately it's too late to do that, nobody will accept a hard fork.

This is partly true.

Banknotes (not coins) have serial numbers. Why? Because this allows them to have (limited) traceability.

If you ever get a banknote from a bank robbery, abduction etc and the serial number of it is marked as "tainted", then you will have a huge problem if you try to deposit it in a bank.

It's the same thing with tainted BTC (from MtGox, Silk Road etc.) and CEX (crypto banks).

Also, they may introduce additional tracing technology, in case the masses want to retain cash at all costs:

https://www.fleur-de-coin.com/eurocoins/banknote-rfid
https://www.eetimes.com/euro-bank-notes-to-embed-rfid-chips-by-2005/

But it's a prime example of why trying to ban ordinals is a mistake. You will absolutely end up banning other legitimate use cases, while the ordinals can easily move their arbitrary data to elsewhere where it is impossible to ban.

A tiny amount. This censorship from Ocean will be irrelevant to Whirlpool, but it's a terrible precedent to set and governments will absolutely latch on to this as more proof that mining pools can censor at will.

Luke runs Bitcoin Knots, in which he has defined OP_RETURN limit to 42 bytes.  Why would he want to do that tho, the limit has been 80 bytes since 0.12:  https://github.com/bitcoin/bitcoin/blob/2e8ec6b338a825a7155fff1be83993e3834ab655/src/policy/policy.h#L72.  Their mining pool will probably ignore lots of transactions.

So it's not really a censorship, it's just bad coding by Bitcoin Knots. It would've been a bit surprising if these high-profile people suddenly started going on a tirade against coordinators, after all the events that happened here.

But lets be realistic here - what percentage of network hashrate does Ocean pool have? I would be surprised if its even at 5%.

Knots sets the upper limit of OP_RETURN data to 42 bytes. Core sets it to 83 bytes.

Whirlpool Tx0s create an OP_RETURN output larger than 42 bytes (but less than 83 bytes), so Knots sees them as invalid. Since this Ocean mining pool is based on Knots, it will not mine these transactions as it sees them as invalid.

F...

This is real? I mean did Jack Dorsey and Luke Dash really do that?

I am seriously sick of this action. What is their motive? Please enlighten me, what do they have to win taking this measure?