What exactly is censorship on Bitcoin?
Here's my answer: certain addresses being blocked on consensus level.
Changes to policy to limit specific forms of transaction is not censorship, it's discrimination.
I'll explain what I mean by that.
Bitcoin has always discriminated in terms of what can go into a transaction. It has never been possible to put whatever you want into a transaction, just like it's never been possible to double spend a UTXO. I'm glossing over a ton of minutiae here, for simplicity.
The previously agreed amount of data that is allowed in a transaction has been set to a reasonable level, through OP_RETURN. There have been disagreements as to that level, but even the most permissive amount was 80 bytes of data in practice. This has been more than enough, and it has been enforced by policy, not consensus.
Since SegWit and Taproot, more ways to put arbitrary data (spam) on chain have been discovered. That is to say, the ability to do these things was right there, as unintended consequences of development changes. Uncaught bugs, or a lack of forethought about human behavior.
Filters on the policy level have been ineffective in containing spam. However, they have provided individuals who are against spam with tools to control their own nodes and mined blocks.
Individual policy choices are a form of discrimination, not censorship. Discriminating against certain types of consensus-valid transactions is perfectly fine. I even go so far as to say that discriminating against transactions from certain address is also completely fine. These are all individual choices. Every individual on the network is free to make those choices. Anything short of that is coercion.
Consensus rules, on the other hand, are where censorship is possible. This is where it would be possible to block certain addresses from moving their UTXOs. As I understand it, this is usually termed confiscation. In practice, this would likely be the result of making some technical type of coin unspendable. In theory, some list of addresses could be drawn up that says they can never move their coins. Good luck getting that adopted.
Consensus changes that do not prevent certain addresses from moving their UTXOs are not censorship.
Making it so that transactions containing arbitrary data invalid is not censorship. Making those transactions more expensive is not censorship. Private key holders will still be perfectly able to move their UTXOs. They can even add some arbitrary data through OP_RETURN, or jump hoops (and pay fees) to encode their data some other way.
This is discrimination against certain types of transactions. Those which have no intention of using Bitcoin as money, or which misuse the network for their own purposes (I use the word misuse here to mean that they are using exploits which were not intentional developments). If the majority of the network decides to eliminate the possibility of those transactions in the future, that is not censorship. And, as previously mentioned, that has not been effective on a policy level. The consensus level is all that is left.
I'm not going to discuss the currently proposed soft fork in extensive detail, except to say that I think the proposal is technically extremely reasonable in my understanding. Compromises have been made to allow for other specific potentially useful data types by consensus. The language about legal consequences is completely unnecessary, and I hope it is removed. I hope this proposal or a similar one passes. Bitcoin is money, not data storage.
To hammer these points further: I might morally object to some miner rejecting transactions from specific addresses, but I can't do anything to force them to include those transactions in blocks they mine. I can put public pressure on them to change their view, but I can't force them to do so. This would still not be censorship. All individuals on the network are free to do what they want, including rejecting transactions they disagree with.
Here's the beautiful thing: we're not all the same! One miner might reject some transactions. Another one almost certainly will include those transactions. This is primarily why filters don't "work" - someone will always mine valid transactions. I still support filters on the node level. Nobody can force me to include transactions I don't want in my mempool.
In other words: as long as the consensus is not making it impossible for certain addresses to move their coins, it's not censorship. Discriminating against certain types of transactions or certain arrangements of arbitrary data is not censorship. Everyone on the network is still free to move their UTXOs. Bitcoin is useful as money. The best money. That's the important thing.
What do you think?
