A blockchain analytics platform by the name of BlockSeer has recently introduced a beta version of a new Bitcoin mining protocol they have been working on. They have chosen a rather apt name for this pool, as it is called Blockseer Mining Pool, and what makes this one stand out from the rest that exist in the market is the fact that it is able to censor transactions that are made from any blacklisted wallets. This pool will create an expansive list of blacklisted crypto wallet and it will do so by leveraging several sources. This includes the labeling data of BlockSeer and WalletScore, along with the US Office of Foreign Assets and any other verified sources they can find.
The pool will be able to use this list for identifying transactions that it will not be ready to process. Moreover, all miners who become a part of this mining pool would also be required to comply with the protocols set forth by the Know-Your-Customer (KYC) policy. The COO of DMG, Shelden Bennet made a statement about this matter. He disclosed that this mining pool’s priority is to avoid processing any transactions that are requested from wallets known for their use in malicious activities. Bennett went on to say that the people operating these wallets were ‘sullying’ the reputation of cryptocurrencies by using this particular medium, with Bitcoin being the most popular target.
According to Bennett, the damage this inflicts on cryptocurrencies’ reputation has impeded their widespread adoption and also harms their mainstream reputation. A former developer for Monero, Riccardo Spagni is known in the space as a fluffpony. He took to Twitter to make a suggestion and said that this could become a slippery slope for the crypto industry. He speculated that there was a possibility of transaction censorship becoming a common occurrence, primarily due to the increasing regulatory pressures.
But, Spagni was really concerned about was the fact that regulators could begin thinking that this could be a good idea when it comes to extreme cases like the OFAC crypto list. If that happens, it wouldn’t be far off from enforcing it in the form of laws. For preventing this from happening, Spagni suggested that Bitcoin’s privacy be increased. He highlighted that things, such as p2pool and v2 would make this kind of censoring pretty much unenforceable. In his opinion, it is better to rely on these measures rather than praying or hoping.
P2pool was established back in 2011 and is a decentralized Bitcoin mining pool, whereas Braiins introduced the Stratum V2 draft. This is basically a complete overhaul, which implemented the BetterHash secondary protocol. It enables the constituents of the mining pool to make decisions about the composition of a mined block. If this protocol is used, it would be impossible to censor a mining pool at all. Even though it does require a formal review, as said by the co-founder of Braiins, Jan Capek, the Stratum V2 has already been given grants from Square Crypto, so it can be developed further.