Bitcoin's Censorship Resistance

One of Bitcoin's variable properties is censorship resistance. Censorship resistance refers to the ability of a decentralised system to make it costly for someone trying to prevent others from using the system, while rewarding those who allow free usage.

In Bitcoin, a participant can only effectively censor others if they control which blocks are added to the blockchain. In other words, an active censor must control a majority of the mining network.

When a censor prevents specific transactions from being included in the blockchain, they are directly forgoing the transaction fees that they would have otherwise collected, and leaving them to be collected by any non-censor. This creates a financial cost for censoring transactions, and a reward for not censoring. The higher the cost, the harder it becomes to censor the network over time.

We consider the cumulative income differential between a censoring and a non-censoring miner as the cost imparted by Bitcoin on a censor—this is a well-known measure of censorship-resistance in Bitcoin security research.

The total dollar value of transaction fees on the Bitcoin network is thus directly related to its level of censorship resistance. The greater the value of these fees, the higher the cost for anyone attempting censorship.

Over time, as the total value of fees on the Bitcoin network has increased, its censorship resistance has also strengthened. Fees paid on the Bitcoin network have increased from $2.15m in 2013 to $796m in 2023.