New Bitcoin Mining Pool Claims it Has Tools to Censor Transactions on the Blockchain

Photo by Kevin Ku on Unsplash

A tech and blockchain company is claiming that its new Bitcoin mining pool has the tools to enable it to censor blockchain transactions as the blocks are mined. According to a statement from DMG, the Blockseer mining pool parent company, the new tool will allow them to exceed compliance requirements set by the US Government of Foreign Assets Control.

Censoring Capabilities

The ability of the mining pool to censor transactions means that any high-risk wallets, which use the Bloocksee mining pool, will be successfully excluded from the posted blockchain. According to a statement from DMG, all users of the mining pool will need to go through a KYC process. The company states that blocks posted on the Bitcoin blockchain by the Blockseer pool will only include filt5ered transactions using labeling data developed by Blockseer and Walletscore. Other sources of data that will be used during the verification process are that from the US OFAC crypto address blacklist.

DMG also claims that the Blockseer pool will help to decentralize the Bitcoin blockchain further. Consequently, it will readjust the balance of the hash rate to North America where many Bitcoin nodes operate.

The Development Process

DMG has been working on its new mining pool over the past two years. To develop it, they have engaged the services of various technical experts, accounting firms, and legal firms. These companies have been working on investigating and testing data from various Bitcoin mining pools. Currently, there is no requirement for private mining pools to meet any reporting or data standards. Blockseer developed a new mining pool that focuses on meeting high reporting and data standards. Consequently, participants can be assured that proper governance is in place for any data reports, which will be verified by an independent third party.

Is it a Threat to Bitcoin

While Blockseer is promoting its new tool as a tool for security, many see the new mining pool as a threat to Bitcoin. One reason why Bitcoin is so popular is that its transactions are censorship-resistant. Additionally, its blockchain is decentralized. Consequently, when a central entity develops the right to reject a set of transactions, it does not look good for the decentralized nature of Bitcoin.

If the Blockseer mining pool is successful, the government could force all other mining pools to adopt similar technology. Consequently, while Bitcoin miners operate in a decentralized manner, mining pools, which account for most of the hash power are centralized. It could give governments more control over Bitcoin that was intended when Satoshi Nakamoto launched Bitcoin over a decade ago. Such control could give governments the ability to decide who can participate in the mining process.

Summary

Today, Blockseer is considered one of the top 15 mining pools in the world regarding control over the Bitcoin hash power. Consequently, its actions already have quite a significant impact. No doubt government regulators will be watching how the new mining pool evolves over the coming few days.

ORTA Mine Fund, the full name of OMF issued by the United States foundation of ORTA Mine Foundation, is a blockchain fund for bitcoin mines around the world.