Bitcoin is under attack, first “clean” block is mined – Understand

Mined this Thursday morning (6) by MARA pool, a mining company in the United States, block 682.160 registered a curious message. “OFAC Compliant Block” was written on the block indicating that the mining company is following the rules of KYC and AML of the US Foreign Asset Control Agency.

Using a block explorer, it is possible to notice that there is a very low number of transactions in this block, only 178 while blocks from other mining pools usually confirm more than two thousand transactions. Even so, the block had a huge size of 2.32 megabytes, which probably indicates that these were sets of large exchanges, which usually transmit transactions in huge batches.

The message in block 682.160 was perceived by the pseudonym researcher 0xB10C on Twitter and shared by Aaron van Wirdum, editor at BitcoinMagazine, who called the attitude of an “attack on Bitcoin’s fungibility”.

The fungibility refers to the equality of value among all currencies in the network, which is hampered by the transparency of the blockchain, since each bitcoin has a different history and therefore can be treated differently.

The choice by a mining pool, under the supervision of a state agency, not to confirm certain transactions while validating others (which have gone through KYC exchanges) denotes this. In this way, the community discusses solutions.

Developers, miners and users react negatively

There were several negative reactions, including that of Bitcoin developer John Newbery, who tweeted a disgusting emoji. Blockstream CEO Adam Back, also commented the fact discussing solutions to the problem, but suggests that game theory would solve the problem by itself.

For former Bitcoin developer Matt Corallo, avoid address reuse would be one of the only measures that users could take to avoid problems in that specific case. Bitcoin creator Satoshi Nakamoto himself gave this advice to users to improve their level of privacy on the network.

A bitcoin miner who commented the tweet said he was determined to take his hashrate dedicated to that pool and direct it to the Slush Pool. If most miners make a similar decision, the problem of transaction censorship is further mitigated.

The bloc was so controversial that, second BitMex Research has not even given the go-ahead for Taproot, an update long awaited by bitcoiners that should increase the privacy of transactions and improve the scalability of Bitcoin.

Was it worth mining a “censored” block?

It is worth noting that, while other mining pools do not follow the same condition as the MARA pool, transactions that are not considered “clean” can be confirmed by other miners.

The economic incentive, in fact, is precisely not to censor transactions. According to Cointimes, blocks 682,169 and 682,171 received about 0.31 BTC just for transaction fees, while the “clean block” 682.170 earned only 0.05 BTC in fees. Compliance with the requirements of the US Foreign Asset Control Agency cost the mining company, taking into account the current quote, about $ 15,000.

MARA is a pool created by the Marathon Patent Group, a company that closed the year 2020 with US $ 217 million in cash and has been expanding its operations in the United States. The company bought the Brazilian mining company FastBlock for US $ 30 million eight months ago and expected to have 7.6% of the chain’s hashrate at the beginning of the year.

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