Blockchain Censorship

Anton Wahrstätter, Jens Ernstberger, Aviv Yaish, Liyi Zhou, Kaihua Qin, Taro Tsuchiya, Sebastian Steinhorst, Davor Svetinovic, Nicolas Christin, Mikolaj Barczentewicz, Arthur Gervais

Keywords: Blockchain, Censorship, Security

Abstract:

Permissionless blockchains promise resilience against censorship by a single entity. This suggests that deterministic rules, not third-party actors, are responsible for deciding whether a transaction is appended to the blockchain. In 2022, the U.S. Office of Foreign Assets Control (OFAC) sanctioned a Bitcoin mixer and an Ethereum application, challenging the neutrality of permissionless blockchains.

In this paper, we formalize, quantify, and analyze the security impact of blockchain censorship. We start by defining censorship, followed by a quantitative assessment of current censorship practices. We find that 46% of Ethereum blocks were made by censoring actors complying with OFAC sanctions, indicating the significant impact of OFAC sanctions on the neutrality of public blockchains.

We uncover that censorship impacts not only neutrality but also security. After Ethereum’s shift to Proof-of-Stake (PoS), censored transactions faced an average delay of 85%, compromising their security and strengthening sandwich adversaries. Finally, we prove a fundamental limitation of PoS and Proof-of-Work (PoW) protocols against censorship resilience.

Track: COI (submissions co-authored by SAC)

Submission Guidelines Scope: Yes

Submission Guidelines Blind: Yes

Submission Guidelines Format: Yes

Submission Guidelines Limit: Yes

Submission Guidelines Authorship: Yes

Student Author: Yes

Submission Number: 665