Summary
Bitcoin is resistant to censorship, but not immune to it. Individual miners can choose to censor transactions by not including them in the blocks they mine, but other miners can still include those transactions in their blocks. However, if a set of miners in the minority decide to censor a specific subset of transactions, the amount of blockspace available to those transactions will shrink, leading to fee pressure and higher fees for those transactions. This incentivizes other miners to include the censored transactions in their blocks to earn the extra revenue. This dynamic ensures that Bitcoin remains censorship resistant as miners are motivated by market dynamics to include transactions that are being censored.
Key Points
1. Bitcoin is censorship resistant: One of the central value propositions of Bitcoin is its ability to resist censorship. While individual miners have the power to refuse to include certain transactions in their blocks, they cannot prevent other miners from including those transactions. This ensures that transactions can still be processed by the global system, as long as there are miners willing to include them.
2. Censorship resistance is not absolute: Although Bitcoin is resistant to censorship, it is not immune to it. Any miner can choose to censor specific transactions, limiting the blockspace available to them. This can create fee pressure for those transactions, as they need to compete with other transactions for timely confirmation. However, this fee pressure will only benefit the miners who choose to include the censored transactions.
3. Incentives drive inclusion of censored transactions: The fee pressure created by the censorship of specific transactions incentivizes miners to include them in their blocks. This is because including these transactions can lead to increased fee revenue for the miners. Over time, this dynamic will result in the growth of the hashrate of miners willing to include censored transactions until an equilibrium is reached, where both groups of miners are making similar income.