Thread by @jurbed

How easy it is to "fork-off" from censors in #bitcoin? People commenting on my previous thread seem to think it's easy. Not so fast.

threadreaderapp.com/thread/1327206…

Let's start by explaining various types of consensus rules changes. You can make them more strict (also called a soft fork). A soft fork can be introduced by majority of hashpower, nodes have absolutely no say in a soft fork.

A successful continuous transaction censorship is a form of soft fork. A miner would never mine a block with a blacklisted transaction. If you run a verifying (full) node, you just see blocks that confirm to consensus rules and you don't know that someone is censoring.

To repeat how nodes know they are on the best chain: They verify all the consensus rules (transactions are signed, block size is below limit, mining difficulty met, ...) and then they verify they are on the longest chain (there is no longer chain that also validates).

Another type of fork is a hard fork - relaxing rules. For example increasing block size is a hard fork. In order for nodes to follow a hard fork, you need to upgrade all the nodes, because they need to validate the blocks that were not valid under the last rule.

Censorship is a soft fork. It can be introduced by miners. They are valid blocks that just do not contain transactions that miners consider tainted. A node does not know or choose that they want to be on the censored chain.

If you want to punish miners for censoring, it is harder to do, because it requires consensus - and that's what mining is for. If you have previous consensus on what is censorship, you can refuse censoring transaction. But how do you make sure?

One approach would be to fork based on orphaned blocks. If a valid block contains a censored transaction and the best chain goes around it, orphaning it, you punish the miner. But how? Miners don't need to identify their blocks. Each block can be unique.

Also, you would need consensus on which block was first. We have a way to do it - it's called mining. You cannot tell what happened before anything else if it is not in Bitcoin timechain. So how do you know if the block was orphaned because of censorship or it was just late?

You also need to agree on what is censorship. Two ways: Either you agree on blacklist - how? Do you include a government signed blacklist in the block to decide what was censorship at the block time?

Another way would be to prefer block with higher fees. Not mining a transaction with a high fee in the block could be censorship. But how do you know if the miner saw the transaction? We have a consensus on what are known valid transactions - it's called mining.

So really you have to agree on what is censorship before you can punish it (and fork off of it). If you can agree on it beforehand (know which block, which tx, which blacklist), you already reached consensus and don't need mining. Please write a paper, that would be huge!

Then you need to identify censors. But they can change their identity every time, while still proving to the government/censorship body that they are censoring. They submit their partial proof of work to the government API, why making their blocks random - new address every time.

Please note, that all nodes need to reach this this conclusion at the same (block)time. Also note, that if this happens, nothing is won. You did not fork off, the censors can (and will) come to your fork and do it again. Do you fork twice a day?

The fundamental problem with punishing censors is reaching consensus about who the censor is, in a decentralized and fair way and punishing the censor long term (assuming they can be and stay identified).

In conclusion: Soft fork is a bitch. It can be enforced by miners and the nodes can do very little about it. They can "fork off", but the soft fork enforcing miners can come back.

Your full node does not help in this in any way.

Side note: When you have two blocks at the same height, it is rational to continue from the one that has lower block reward. Why?

1. you want your competitors to have as little money as possible, otherwise they could buy more hashrate and lower your profit.

2. because the lower block reward, it means that the transactions with higher fees were not included and you can increase your profit by including them.

Thus in a two block same height situation, it is profitable to follow the censor's chain, especially if you are not a censor.

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