The Marathon mining pool included in a Bitcoin block a declaration of compliance with the regulatory guidelines of OFAC, the US Office of Foreign Assets Control.
The signature included in the coinbase transaction, which includes the new coins generated by mining the transactions, says: «MARA Pool – OFAC Compliant Block».
As reported by CriptoNoticias, Marathon announced on March 30 that it would start to apply anti-money laundering (AML) criteria and practices when processing Bitcoin transactions, according to OFAC legislation in the United States. Thus, the mining pool does not will process transactions made by people sanctioned by the regulatory body.
Yesterday, May 5, Marathon announced in a press release that it had become the first group or pool of mining to add a block regulated by OFAC in Bitcoin.
According to them, since May 1 they have moved all their hashrate to your new mining pool. It should be remembered that the hashrate of this mining group increased by 82% during this year, CriptoNoticias reported, reaching a rate of 1.29 EH / s.
Marathon indicates in the press release published yesterday that as of June 1, 2021 they will begin to accept other US mining companies in their pool.
The block mined by Marathon contains only 178 transactions, when currently in Bitcoin the blocks usually have more than 2,000 transactions. In addition, a total of 0.05 BTC was charged, equivalent to more than USD 2,800 according to the CriptoNoticias price calculator.
Some transactions paid commissions equivalent to 15.28 and up to more than 40 dollars, substantially more expensive than a light transaction currently costs. In this sense, it should be noted that transactions are light, with only 1 or 2 exits. In addition, some contain several signatures ( multisig ), so they could belong to exchange houses or corporations that meet this security requirement.
It is also noteworthy that the block of this pool does not signal in favor of Taproot , Bitcoin scalability solution for which a test round is being done or speedy trial , as phase 1 of its activation path in the protocol.
Regulated Bitcoin mining: a political and geostrategic issue
Fred Thiel, CEO of Marathon, offers geostrategic arguments in his explanation about the new direction of the company and now mining pool.
The mining pool that we recently launched is the archetype of our philosophy and approach to the industry. Today, most of Bitcoin’s hashrate is concentrated in a single country outside of the United States, and there is very little regulatory oversight as to how miners process transactions. We believe that the concentration of mining groups and the lack of supervision entails potential risks for our industry.
Fred Thiel, CEO of Marathon.
Also, Thiel highlighted the need to “decentralize and strengthen” the network in the face of the risks that “other governments interfere in the industry”.
“By excluding the transactions of malicious actors, we will provide peace of mind to investors and regulators since the bitcoins we produce are ‘clean’ , they are done ethically and in compliance with regulatory standards “, declared the executive.
Also, the CEO commented that some funds and corporations have approached Marathon with the interest of buying” clean “bitcoins However, he did not give details about what would be a new business model for the company in addition to mining bitcoins.
BitMEX analysis suggests censorship and selective mining in Marathon
The analysis firm BitMEX Research includes in its fork monitor a notification about the block mined by Marathon.
In the report, BitMEX points out that the template or preimage of the block generated by its node is notably different from the block finally generated by Marathon.
Thus, BitMEX includes a list of 8 transactions that were not included in the block, despite the expectation that they were. According to the research firm, this could indicate censorship. The firm does not include in this list transactions that paid less than 5 satoshis per byte (sats / byte).
On the other hand, BitMEX gave a list of 13 transactions that were included in the block unexpectedly , that is, they were not foreseen by the BitMEX node but are part of the block mined by Marathon.
These transactions were not in the mempool of the BitMEX node waiting to be mined , which suggests that Marathon is processing transactions privately , streaming these transactions directly to your node and your mining pool.
The developer identified with the pseudonym b10c announced that to monitor these discrepancies between mempool and mining activity, it had the MiningPool.Observer tool.
This tool would allow, among other things, to compare the block template and the finally mined block. As they explain, a block template or block template is the preimage that is manufactured from the Bitcoin Core client with transactions that pay the highest commission rate in satoshis per bytes. At the end, the template is compared with the mined block to analyze their similarities and differences.
Censorship on Bitcoin and attacks on the fungibility of the currency
Bitcoin pioneer developer Adam Back proposed to discuss in around using a Bitcoin scalability proposal ( Bitcoin Improvement Proposal , BIP), which he did not mention directly for committed transactions.
He also pointed out that applying game theory could work in this case, rather than having to create some kind of cryptographic mechanism that obfuscates the nature of transactions and addresses, such as zero-knowledge proofs ( Zero Knowledge Proof ).
The game theory argument has been accepted by var ios members of the community, where the strategy that is assumed from now on must be thought based on what the rival, in this case OFAC, would do in turn. It is about elucidating how OFAC would act in this game in the face of what Bitcoin users do.
The rest of the miners that are part of the Bitcoin ecosystem, they could accept these mined blocks in compliance with regulations, or criteria that groups like Marathon recognize as legal based on OFAC guidelines. Thus the chain would continue and these blocks would be included in the history of Bitcoin without problems.
Another mining group that follows the OFAC guidelines is Slush Pool, CriptoNoticias reported in February of this year. In this case, they would not censor transactions, but as a company they would not send mining reward payments to sanctioned addresses.
If Bitcoin miners decide to leave these blocks out of their chains, it would be a forced fork, where two almost identical but different chains would exist in parallel.
This scenario would be contentious at this point, but if more mining pools decide to censor or discriminate transactions in Bitcoin, a debate on how the ecosystem should act in these circumstances.
On the other hand, some say that changing the portfolio address could serve to obfuscate transactions, but mixing the currencies between several addresses could end up with ‘ dirtying ‘their history with their trace.
The question is to what extent are mining pools willing to accept’ dirty ‘or’ tainted ‘transactions for small amounts of UTXO ( outputs ) sanctioned?
If the mining groups follow these practices, some consider that it would be an attack on the fungibility of Bitcoin, consisting of preventing some currencies from mixing with others or being part of the same transaction.
While it is technically true that Marathon can include a label or message in the Bitcoin blocks it produces, it is against the ethics of this technology to censor transactions, wherever they come from.
