What is censorship resistance in blockchain technology?
Of CNBCTV18.com IST (published)
Mini
Censorship resistance is the feature in blockchains that ensures that a transaction will go through as long as all specified criteria are met. This ensures that no government or organization can influence or change transactions on a blockchain, regardless of how much power they have.
When a country or government wants to destroy an influential person or organization, one of the first things they do is freeze their assets and freeze their bank accounts. In a sense, it paralyzes the person or organization, and the authorities can then try to persuade them to do what they want.
We have seen such influence recently implemented in practice with Western sanctions against Russia after the Kremlin invaded Ukraine. While it may seem like an appropriate thing to do to weaken a person or organization, there is always a chance of abuse.
This article discusses censorship resistance, a feature of blockchain technology that can help avoid such government abuse.
What is censorship resistance in blockchains?
Censorship resistance is the feature in blockchains that ensures that a transaction will go through as long as all specified criteria are met. This ensures that no government or organization can influence or change transactions on a blockchain, regardless of how much power they have.
Censorship resistance in blockchains is completely different to how regular banks work – where everything is tracked, and authorities can ask banks to freeze certain assets and accounts or even stop transactions from happening. In a world where everything runs on money, any organization or government that controls it leads to a disproportionate distribution of power.
Censorship resistance can also refer to the blockchain’s immutable record of transactions. Blockchains are basically distributed ledgers. Each node in the system stores and updates its version of the ledger containing details of all the transactions ever made. Therefore, no government or authority can censor/change transaction details.
Why is resistance to censorship important?
Blockchains, at least the main ones like Bitcoin and Ethereum, are revolutionary because they deliver the power back to the people. It’s the equivalent of the 19th-century Italian protest song, Bella Ciao, but with real-world applications.
The first importance of censorship resistance is that it provides a way for people to own assets without the stamp of authority from governments. It doesn’t take long for good governments to turn sour or turn against a minority or develop into dictatorships. But if people trade through blockchains, there is a limit to government control.
The other importance of anti-censorship is to protect the idea of privacy. While the blockchain ledger is publicly available, there is an opportunity for complete privacy, as powerfully demonstrated by Bitcoin’s pseudonymous founder, Satoshi Nakamoto – we know how much bitcoin he probably has, but no idea who he is.
The third importance of censorship resistance is that blockchains can never be destroyed. No government or entity, let’s say hackers, can bring down a blockchain as big as bitcoin unless they can take control of 51 percent of the total hash rate on the network. However, it will cost tens of billions of dollars for the ability to influence the blockchain (no guarantees).
What are the threats to censorship resistance?
There are mainly two threats that can cause the censorship resistance of blockchains to fall. First is the availability of the internet, which is controlled by internet providers and authorities. Authorities may block the internet or certain websites that are important for blockchain transactions to occur.
This is a clear threat today, as some parts of Ukraine witnessed when Russian forces blocked the internet from the area. A simple solution to that was Elon Musk’s Starlink which provided internet from beyond the clouds. We may soon see more such technology that can further strengthen the censorship resistance of blockchains.
The second threat is direct manipulation of blockchains by an entity taking over the majority of the hash rate and thus making the blockchain unfair. This is very expensive and very theoretical at the moment, but it is a possibility. It would roughly cost more than $100 billion to take over the bitcoin blockchain, but that’s certainly an amount no one is willing to part with for such a chance.
Conclusion
The darker side of censorship resistance is that even the bad guys working on bad stuff get away with it because the government can’t track or bring down blockchains. This is what is being argued in legislatures around the world as the reason they want to ban cryptocurrencies in their jurisdictions.
The fact is that this blatant abuse of censorship resistance in blockchains is done by a small fraction of people, and improved technology may soon tackle it. But that is not enough reason to deprive people of the power to own their own destiny without going along with every whim of the authorities.
