The rise of distributed ledger technology, starting with Satoshi Nakamoto's Bitcoin protocol, has promised a revolution in financial freedom and data autonomy. At the core of this promise is the concept of "censorship resistance" – the ability of a system to allow any entity to participate and conduct transactions without being hindered by any third party or central authority. According to experts at Tan Phat Digital, as the blockchain ecosystem moves towards widespread acceptance by traditional financial institutions and faces increasing regulatory pressure, the question of whether censorship actually exists in blockchain has become more complex than ever.
This report comprehensively analyzes that censorship in blockchain is not a binary phenomenon but a variable spectrum, most clearly present in the application layer, intermediaries, and through the economic mechanisms of the consensus layer, rather than at the core mathematical rules of most decentralized protocols.
Theoretical framework and pillars of censorship resistance
To understand how censorship can penetrate a system that is designed to prevent it, it is first necessary to identify the technical characteristics that make censorship resistance possible. In the context of public blockchains such as Bitcoin and Ethereum, censorship resistance refers to ensuring that the rules governing the network are established in advance and cannot be retroactively changed to serve a particular agenda. This is radically different from the traditional financial system, where institutions can freeze accounts or block transactions based on administrative or political orders.
Core components of immutability and decentralization
Censorship resistance is based on a combination of cryptography, peer-to-peer (P2P) networks, and economic incentives. First, immutability ensures that once a transaction has been recorded, reversing it is functionally nearly impossible due to the tight coupling of cryptographic hashes between blocks. Second, decentralization disperses power across thousands of independent nodes, making it impossible for any single entity to take control to impose bans. Ultimately, transparency allows every member to verify the validity of the ledger, creating a community oversight mechanism.
The security model of large blockchains like Bitcoin is based on the assumption of an honest majority. In a Proof-of-Work (PoW) mechanism, a 51% attack allows an attacker to rewrite history or block new transactions, but the enormous resource cost makes this unfeasible and economically unsustainable. For modern Proof-of-Stake (PoS) systems, the risk shifts to the concentration of stake and the possibility of large validators being forced by regulatory regulations.
Trade-offs between performance, cost and degrees of freedom
One of the root causes of the censorship loophole is the blockchain's "impossible triangle" (trilemma). Here are the differences between the models:
Blockchain prioritizes censorship resistance (e.g., Bitcoin):
Consensus mechanism: Decentralized Proof-of-Work.
Node hardware requirements: Low (incentivizes individual users).
Transaction control: Permissionless (Permissionless).
DPoS.
location.
Censorship at the Application Layer: The Gateway to Centralization
While the core protocol layer may maintain neutrality, the majority of users interact with the blockchain through the application layer (dApps), wallets, and intermediary infrastructure providers. This is where censorship takes place most frequently and most effectively because of the highly centralized nature of these services.
The Role of RPC Providers and the Risks of Infura Dominance
Most Ethereum users and EVM chains do not run their own nodes but rely on Remote Procedure Call (RPC) nodes to submit transactions and query data. Infura is the world's largest RPC provider, powering millions of MetaMask users and thousands of dApps.
This dependency creates a single point of weakness. Infura is subject to US sanctions, and has actually blocked users in countries like Venezuela, Iran, and Lebanon from accessing the Ethereum network. When a user uses MetaMask with the default configuration, their transactions must go through Infura. If their wallet address or IP is blacklisted, Infura may refuse to broadcast that transaction to the network. This creates a paradox: although the underlying Ethereum network remains open, the "path" to it is blocked by a centralized entity.
Common forms of censorship at the application layer:
Wallets: Implement sending/receiving address filtering in the user interface. Medium impact because users can change wallets.
RPC Provider: Block transaction broadcast based on IP or wallet address. The impact is high because it is the main access point.
Front-end dApp: Blocks sanctioned addresses from connecting to Smart Contracts. High level of impact for common users.
Bridges: Ability to freeze assets or refuse to transfer chains. The level of impact is very high with the risk of losing capital.
Consensus crisis and legal turning point 2025
One of the biggest events challenging blockchain neutrality is OFAC imposing sanctions on Tornado Cash in August 2022. However, as noted by Tan Phat Digital, on March 21, 2022, 2025, the US Treasury officially lifted sanctions on Tornado Cash. This decision follows the ruling of the 5th Circuit Court of Appeals (Van Loon case), which affirmed that immutable smart contracts are not "property" under the current legal definition and cannot be punished like conventional entities.
Even though the sanctions have been lifted, the lessons of consensus structures still remain:
Proposer-Builder Separation (PBS): Ethereum validators often use MEV-Boost to outsource block construction. Relay intermediaries like Flashbots have proactively excluded Tornado Cash transactions to comply with US law.
Consequences for security: Censorship increases waiting times by an average of about 85%. Longer transaction delays in the mempool enable attackers to perform more effective "clamp attacks".
MEV and Censorship Metrics on Ethereum (2024-2025 Period):
Block Rate via MEV-Boost: Ranges from 90% to 95%.
Block Rate Conforms OFAC compliance (at peak before 2025): Reaches 63% - 70%.
Increased latency for censored transactions: 85%.
Number of large uncensored Relays: Only about 3 out of 7 main Relays.
See more: What are Trustless and Permissionless?
Censorship in the Bitcoin network: Mining pool reality 2025
Bitcoin is often considered the last bastion of censorship resistance, but the centralization of mining pools has created worrying precedents.
Efforts by Marathon and F2Pool: In 2021, Marathon tested a "fully compliant" mining pool. More notably, in late 2024 and early 2025, F2Pool – accounting for about 11% of global hash power – continued to be found filtering transactions related to OFAC-sanctioned addresses.
Strong Censorship Risk: The real problem arises if a majority group of miners not only rejects banned transactions but also refuses to build on any blocks containing those transactions. If this happens, Bitcoin will turn into a permissioned system. Currently, Bitcoin's hashrate is heavily concentrated in entities like Foundry USA (31.5%) and Antpool (16.6%).
Privacy: Technical Barriers to Censorship
The difference between Bitcoin and privacy-focused projects like Monero (XMR) is evident in its censorship resistance:
Transparency transparent:Bitcoin is public and traceable, easily blacklisted. Monero is private by default, making censorship nearly impossible due to lack of data.
Recipient addresses: Bitcoin uses reusable public addresses. Monero uses disposable Stealth Addresses.
Transaction amount: Bitcoin makes the amount public. Monero encrypts funds via RingCT.
Fungibility: Bitcoin has the risk of "cloudy coin". Monero is perfectly fungible because history cannot be traced.
Consensus mechanism: Both use PoW, but Monero prioritizes CPU-friendly (RandomX) to maintain miner decentralization.
Next generation technical solutions (2025-2026)
Development community is rolling out upgrades important to reinforce neutrality:
Ethereum 2026 Roadmap:
Glamsterdam Fork (Expected mid-2026): Introduces perfect parallel processing, raises Gas limit to 200 million, and transitions to ZK-proof authentication to increase speed to a potential 10,000 TPS.
Heze-Bogota Fork (Expected late 2026): Focus on privacy and censorship resistance. This is where the FOCIL (Fork-Choice enforced Inclusion List) solution is expected to be implemented, allowing a validator committee to force block builders to include specific transactions.
Encrypted Mempools: Projects like Shutter Network and Aptos are implementing transaction encryption right out of the wallet. Transactions are only decrypted after being placed into blocks, preventing miners from seeing the content for censorship or performing malicious MEV.
Decentralized RPC Infrastructure: Pocket Network (POKT) has processed over 1 trillion requests through a network of over 5,000 decentralized nodes, providing a secure alternative to centralized services like Infura.
Social Slashing: Confiscation of validator shares through social consensus if systematic censorship is detected.
UASF (User-Activated Soft Fork): Node operators reject the rules of large validators to regain control of the network.
Community migration: Full transfer operations to another protocol, weakening the economic value of the censored chain.
See more: What is Decentralization?
Typical Case Study on Censorship Censorship and Resistance
Here are 10 real-life cases illustrating the battle between censorship and censorship resistance in the blockchain space (updated to 2026):
The Steem takeover and the birth of Hive (2020): When Justin Sun acquired Steemit Inc and used his financial power to take control, the community implemented a hard historic fork to Hive, completely removing Sun tokens to preserve decentralization.
The case of Van Loon vs. Treasury (2024-2025): Important ruling affirming that Tornado Cash source code is immutable and not "property", leading to OFAC lifting sanctions in March 2025.
Marathon Digital "MARA Pool" (2021): The first Bitcoin mining pool experiment in North America claims to only mine "clean" transactions. The experiment failed after less than a month due to fierce opposition from the community and low profits.
Transaction censorship at F2Pool (2024-2025): Observation tool shows that F2Pool ignored transaction 16f0ada6.. in block 875575 because of its connection to the OFAC drug sanctions list, marking censorship penetration into the Bitcoin mining pool.
Uniswap Labs blocks 253 addresses wallet (2022): Through partner TRM Labs, Uniswap filtered hundreds of wallet addresses from its front-end due to suspicions of coin mixing or hacking, although these addresses could still interact directly with Smart Contracts.
Infura incident blocking Venezuelan users (2022): Due to a misconfiguration when applying sanctions, Infura accidentally blocked all users from a number of countries accessing the Ethereum network, demonstrating the extreme risk posed by centralized RPC providers.
The "Bei Dai" letter on Ethereum (2018): A Peking University student wrote a letter denouncing sexual harassment into an Ethereum transaction to circumvent China's strict censorship system, turning it into permanent evidence that cannot be erased.
Apple Daily archives news on Blockchain (2021): After the Hong Kong newspaper was closed, activists uploaded the entire archive to blockchains like Arweave to ensure press freedom is not destroyed by the government.
North Korea's ByBit Hack (2025):The largest $1.5 billion hack in history triggered a global effort by governments to freeze and recover on-chain assets, creating a thin line between law enforcement and infringement of private property rights.
Monero's Boom in the Darknet (2023-2025): After AlphaBay 2.0 only accepted XMR, Monero asserted its position as the only coin that is truly completely censorship-resistant thanks to its default anonymity, despite being delisted en masse by centralized exchanges.
Frequently Asked Questions
What is censorship resistance in blockchain? This is the property that ensures anyone can participate and conduct transactions on the network according to established rules without being prevented by third parties.
What is Infura and why is it related to censorship? Infura is a provider provides an intermediate RPC that helps the MetaMask wallet connect to Ethereum. Because it is a US-centric entity, Infura is subject to sanctions and can block users based on IP or wallet address.
Can MetaMask block me from making transactions? Yes, if you use the default configuration, MetaMask sends transactions via Infura. Infura may refuse to broadcast your transactions to the network if you are blacklisted.
Is Tornado Cash still subject to US sanctions? No, on March 21, 2025, OFAC officially removed Tornado Cash from the sanctions list following a favorable ruling from the Court of Appeals.
Why did the court lift the Tornado Cash sanctions? The court ruled that immutable smart contracts are self-executing software exam, is not an "asset" that can be owned or controlled, so is not covered by the IEEPA Act.
What is Ethereum's Glamsterdam Upgrade? This is an update expected in mid-2026 to introduce parallel processing, increase the Gas level to 200 million, and apply ZK-proof to increase speed network.
What role does Heze-Bogota Fork play in anti-censorship? This is Ethereum's late 2026 upgrade, focusing on strengthening privacy and implementing a FOCIL solution to force builders to include valid transactions.
How do Inclusion Lists work? It allows the block proposer to list transactions that must be included in the next block, depriving centralized builders of the right to choose (censorship).
Does F2Pool really filter Bitcoin transactions?Yes, 2024-2025 studies show that F2Pool has proactively ignored transactions involving OFAC sanctioned addresses to avoid legal risks.
What is Social Slashing? Is a social consensus mechanism (off-protocol) where the community agrees to forfeit shares of validators that practice severe censorship.
Why is Monero more censorship-resistant than Bitcoin? Because Monero is anonymous by default (hides sender, recipient, amount), making it impossible for miners to know which transactions are blacklisted for censorship.
How does the US Strategic Bitcoin Reserve (SBR) affect decentralization? Government The US holds millions of BTC which could create greater regulatory pressure and efforts to censor non-compliant addresses on the network.
There is a risk of censorship if these builders comply with the sanctions.How many uncensored MEV Relays are there? Among the 7 largest Relays today, only about 3 Relays (such as Ultra Sound Money, Agnostic Boost) are committed to not censoring transactions.
What is an Encrypted Mempool? Is a transaction encryption technology. until it has been sorted into the block, preventing the builder from knowing the transaction content to perform moderation or front-running.
How does Pocket Network help users? It provides a decentralized RPC infrastructure, ensuring users are not blocked from accessing the network like when using centralized services like Infura.
What are the lessons from the Steem and Hive events? It proves that if a centralized entity takes over the network, the community can perform a hard fork to migrate to a new chain and staying true to its core values.
Does MetaMask collect my IP address? Yes, when using Infura as the default provider, ConsenSys will collect both your IP and wallet address when you send transactions.
What is ePBS (EIP-7732)? Is a solution that directly integrates segregation Proposer-Builder on the Ethereum protocol to reduce dependence on centralized relays and increase security.
Censorship in blockchain is an entity that exists in many sophisticated forms at the application layer, economic layer and mining layer. However, the lifting of sanctions on Tornado Cash in March 2025 marked an important legal victory for immutable protocols.
According to Tan Phat Digital, the period 2025-2026 will be a pivotal time when solutions such as FOCIL, Glamsterdam and Mempool encryption are deeply integrated into the core protocol. Blockchain is not only based on source code but also on the will of the community - those willing to protect the principle of an open, transparent and permissionless financial system. In a world where digital freedom is being challenged, blockchain remains the most powerful tool for creating indestructible public squares.
Share
