Author: Peter Todd 2013-03-10 08:18:57
Published on: 2013-03-10T08:18:57+00:00
In this email conversation, Daniel Lidstrom discusses his views on censorship resistance in the face of scaling with regard to Bitcoin. He suggests that if he doesn't preserve his privacy when using Bitcoin, he runs the risk of being censored by miners. To avoid this, he believes in connecting to the network anonymously, not reusing addresses, and perhaps even mixing coins. He thinks that privacy preservation can be made automatic. However, as Bitcoin becomes centralized, one of the types of transactions that will be censored are those that preserve privacy. For instance, local governments could start specifying that transactions must be accompanied by proof of identification.Lidstrom expects anonymity systems to scale to accommodate Bitcoin full nodes, rather than Bitcoin staying small to avoid putting pressure on anonymity systems to scale. He argues that mining in a pool is always an option if anonymity systems don't scale enough. There should always be some countries free enough to allow mining pools to operate, and miners in countries that ban Bitcoin can simply connect to these anonymously. However, the thing that keeps pools honest is that setting up another pool is pretty easy. But if running the validating node required to run a pool costs thousands of dollars, competition just isn't there anymore, and starting a new pool isn't an option. Lidstrom ends by saying that there aren't any clever technical ways to avoid censorship if validating nodes and mining pools are centralized.
Updated on: 2023-06-06T10:22:47.896602+00:00