Bitcoin’s Censorship Resistance: Exploring the Limits and Potential Impact on Transaction Fees

an advantage in terms of fee revenue. However, if the verboten transactions start to saturate the mempool and there is not enough block space available for them, the fee pressure for these transactions will increase significantly.

In this scenario, the green miners who are willing to include verboten transactions in their blocks will have a higher chance of earning more fee revenue compared to the red miners who refuse to include these transactions. As the bidding frenzy among the verboten transactions intensifies, the fees for these transactions will continue to rise, resulting in higher revenue for the green miners.

On the other hand, the red miners who are censoring the verboten transactions will not benefit from this fee pressure. They will continue to earn the same level of income as long as regular transactions are saturating the mempool. However, if the verboten transactions start to dominate the mempool and regular transactions are not enough to fill the available block space, the red miners may face a decrease in their fee revenue.

It is important to note that this fee pressure and revenue distribution only apply to the specific subset of transactions being censored. Other classes of transactions, such as regular transactions, will continue to generate fee revenue for all miners, regardless of their stance on verboten transactions.

In conclusion, while Bitcoin is resistant to censorship, it is not immune to it. Any individual miner has the power to censor transactions by refusing to include them in their blocks. However, if a majority of miners choose to censor certain transactions, they risk losing revenue and potentially being run out of business. In a scenario where a minority of miners censor a specific subset of transactions, the fee pressure for those transactions will increase, resulting in higher revenue for the miners who include them in their blocks.