Recently I was scrolling on Twitter(X) and I came across something rather interesting..
A bitcoin developer that I follow on there (@0xB10C) posted this on his page. [1]
Given the community's commitment to upholding the censorship resistance of our network, I deemed it appropriate to conduct a thorough reading.
Here's what I found:
Firstly, the developers project aims to detect instances where Bitcoin mining pools fail to mine transactions they could have included. The Office of Foreign Assets Control (OFAC), a bureau in the U.S. Treasury Department, is responsible for enforcing economic and trade sanctions aligning with U.S. foreign policy, targeting countries, terrorists, and threats to national security. Over the past weeks, the project identified six missing transactions from OFAC-sanctioned addresses, prompting an investigation into whether these omissions were intentional or had alternative explanations.
The RSS feed reported missing transactions from ViaBTC, Foundry USA, and F2Pool, involving OFAC-sanctioned addresses.The analysis explores various reasons for transactions being absent from blocks, such as network propagation, individual node differences, and pool transaction prioritization. The primary goal is to determine whether mining pools intentionally filter OFAC-sanctioned transactions and assess the impact on Bitcoin's censorship-resistant properties.
One missing transaction from ViaBTC's block 808660 was due to the prioritization of other transactions by ViaBTC's Bitcoin Transaction Accelerator, indicating it was not intentionally filtered. Foundry USA's block 813231 did not include a sanctioned transaction due to potential delays in transaction propagation. Again, unintentional.
According to the report, the analysis suggests that F2Pool omitted transactions from OFAC-sanctioned addresses in blocks 810727, 811791, 811920, and 813357. The reasons for the omission vary for each block, but the common thread is the likelihood of intentional filtering by F2Pool. Here's a breakdown of the reasons for the omission in each block:
Block 810727:
F2Pool did not include this transaction, and instead, another transaction was included. The report suggests that the missing transaction had a slightly higher fee rate but was 3 vBytes smaller than the included transaction. Despite the fee rate advantage, the larger transaction was chosen.
Block 811791:
The report indicates that F2Pool omitted this transaction, and despite having enough space in the block, it was likely intentionally filtered. The presence of extra transactions in the block did not affect the inclusion of the sanctioned transaction, making intentional filtering more plausible.
Block 811920:
F2Pool did not include this large consolidation transaction in the block, and the report suggests that the transaction might not have propagated to F2Pool in time, but it's also likely that it was intentionally filtered. The transaction was marked as "recently broadcast" on mempool.space.
Block 813357:
F2Pool excluded this consolidation transaction from the block, and the report indicates that, similar to the case in block 811791, it's likely intentionally filtered. The transaction had been in the node’s mempool for more than 25 minutes, making it less likely that it wasn't known to F2Pool when building the block.
In summary, the report concludes that these transactions were likely intentionally filtered by F2Pool, This raises the question of why F2Pool, a pool with origins in Asia, is the first pool to filter transactions based on US OFAC sanctions, especially considering that other transactions with similar or lower fee rates were included in the blocks.
The original report can be found here. I highly encourage giving it a read. [2]
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I find myself uncertain about how to interpret all of this information. Despite the seemingly small number of just six transactions, the fact that such situations are possible raises concerns. I'm grappling with whether this should be a cause for worry in the future or if it's perhaps an overblown issue. The writer of the report leaves us with this:
The Bitcoin network, however, continues to work as normal. A single pool filtering transactions does not affect the censorship resistance of the Bitcoin network as a whole. Further monitoring of the transaction selection of mining pools allows identifying when more pools start to filter transactions based on, for example, OFAC sanctions. It also allows miners pointing their hashrate to these pools to make an informed decision on switching to a different pool if they don’t agree with a pool’s (unannounced) filtering policies.
[1]
https://x.com/0xB10C/status/1726964430460588201?s=20[2]
https://b10c.me/observations/08-missing-sanctioned-transactions/
