NY Fed paper: Ethereum’s censorship resistance is ‘tenuous’

[NotATether]

If Ethereum is easily censored, POS coins will be preferred by governments to enact legislative regulations related to them.

The censorship problem actually could be reduced. But it's clear some of ETH owner/community don't care about it by staking their ETH on staking pool which censor TX. https://www.mevwatch.info/ shows 37% block in past month created by pool which censor TX.

Does this mean that coins may not be accepted in the next block if my address is added to their black list?

Well of course POS coins are preferable to the government for CDBCs, because 1) they do not require noisy expensive miners 2) the government can easily become the majority minter of said CDBC, which means 3) they can censor whoever they want.

Ethereum never really cared about censorship at all. It is actually disgraceful. And the answer to your last question is "yes". Or at least it will take very long to mine.

[Faisal2202]

If the Tornado cash case was centralized, it would not be a big problem for the government, as they will be monitored until someone makes a mistake that leads to revealing their location and then sending a force to arrest them, but centralized mixers like Tornado cash make it difficult for governments to stop them.

You mean decentralized?

I expect the government to run some versions of Tornado Cash that currently exist to weaken trust in Mixer or any mixing service associated with Ethereum.

That's not going to be their purpose and I don't think mixing services associated with ETH is topic-related, as I and OP talked about censorship resistance of the ETH network (itself) not some third-party platform providing obfuscating services.

And speaking of introducing their own mixer, that will be so stupid thing to do I mean who will use such mixers which are controlled by governments? That's totally against the purpose of mixers.

[bitmover]

That's not going to be their purpose and I don't think mixing services associated with ETH is topic-related, as I and OP talked about censorship resistance of the ETH network (itself) not some third-party platform providing obfuscating services.

The point is that they censores tornado cash,  the eth mixer, and they realized that ethereum censorship resistance is tenuous. There are still people using tornado cash  but a lot less. As the dapp cannot be stopped.

[dkbit98]

Ethereum never really cared about censorship at all. It is actually disgraceful. And the answer to your last question is "yes". Or at least it will take very long to mine.

If they reversed blockchain once than they can always do it again in future.
But government don't even need to have any blockchain for their CBDC shit, no need for PoS or PoW, they can just run numbers on screen and pretend it's backed by something.

The point is that they censores tornado cash,  the eth mixer, and they realized that ethereum censorship resistance is tenuous. There are still people using tornado cash  but a lot less. As the dapp cannot be stopped.

Is there any way to see stats about using of tornado cash and other micing tools on ethereum?

[bitmover]

Is there any way to see stats about using of tornado cash and other micing tools on ethereum?

In the op there is a chart



There is some more information here
https://dune.com/hildobby/tornado-cash

[dkbit98]

There is some more information here
https://dune.com/hildobby/tornado-cash

Thanks for posting this.
There is much more activity than I initially thought, but it still has much lower popularity and use compared to peak from several years ago before the big bust.
I don't know if there are any other alternatives for mixing ethereum, but I never heard about them and they could be just another honeypot.

[NotATether]

Since Ethereum transactions are easily censored, and transactions on other blockchains like Bitcoin and Monero aren't, they are just going to do what they got to do for coins like Ethereum and then for the other, more stubborn networks (as in 'we do not care what is being ordered as we are decentralized), they put extraordinary amounts of KYC through it or failing that, blackhole them from centralized exchanges and other platforms.

It's no good to be using a network where funds can be frozen. Then it just becomes a bank with no insurance and low payment penetration.

[dkbit98]

Since Ethereum transactions are easily censored, and transactions on other blockchains like Bitcoin and Monero aren't, they are just going to do what they got to do for coins like Ethereum and then for the other, more stubborn networks (as in 'we do not care what is being ordered as we are decentralized), they put extraordinary amounts of KYC through it or failing that, blackhole them from centralized exchanges and other platforms.

I dont see any problem for them censoring any bitcoin transactions.
They already did it with some mining pools, and they are already blacklisting a bunch of addresses and others that are connected.
Now they are even confiscating coins from big exchanges like binance, claiming they are used for terrorism 
It must be very stupid or fake terrorists that are using bitcoin in combination with binance.

[bitmover]

Now they are even confiscating coins from big exchanges like binance, claiming they are used for terrorism 
It must be very stupid or fake terrorists that are using bitcoin in combination with binance.

I think binance growed a lot with dirty money in its early days....

You could withdrawal up to 2 BTC per day without doing any kyc until 2021.

I think some people with legal problems used it for years without any problem, until one day when their accounts were frozen

[dkbit98]

I think binance growed a lot with dirty money in its early days....

You could withdrawal up to 2 BTC per day without doing any kyc until 2021.

Most centralized exchanges worked like that back in the days, and I would not divide and split bitcoins into ''dirty'' and ''clean'', even if many people do that all the time.
And that doesn't mean I am defending Binance and how they are conducting their business at all, especially recently working with idf and biggest terrorist state in the world.
Talking about dirty money, most of it is going into non-stop wars around the world, not on crypto exchanges.

[philipma1957]

Looks like the FED is very satisfied with the sanctions over the tornado cash and how censorship friendly ethereum is.

There are many possible conclusions for this. Could this be good for the price, regulations and even products like ETF? probably.
Is this good for the users? Probably not. Censor transactions is bad, and if someone can censor a transaction this is not very different from banks.

I think this shows how Ethereum is different from bitcoin.

Most of us already know how different Ethereum is from Bitcoin. However, this message from the fed itself is evidence that ETH's censorship mechanism has weaknesses. And speaking of the satisfaction of FEDs they have to be satisfied because they are making defi more regulated and that's the sole conclusion of this report published by them.

That they used the Tornado cash case as proof that the decentralized world needs rules and regulations. Or in other words, they want to centralize the decentralized world. This is not good for all of us. BTW I don't know why the Fed is so concerned about censorship resistance of ETH. I never considered ETH as censor-resistant.

The centralised nature of eth is its real weakness.

If Mr v died today what happens to eth?

AND on the other hand if Mr v does not want censorship how come he could not stop it?

Basically the two questions I ask show a leadership or structural issue with eths centralised nature.

 Here is a third question if  a country grabs Mr v and locks him up what happens to eth?

There is no clear cut step up for eth and the fact that it was easily censored means Mr v is not in the full control he is appeared to be.

I EXPECT MANY more cracks in eth  for the next few years.

[bitmover]

If Mr v died today what happens to eth?

AND on the other hand if Mr v does not want censorship how come he could not stop it?

Basically the two questions I ask show a leadership or structural issue with eths centralised nature.

 Here is a third question if  a country grabs Mr v and locks him up what happens to eth?

That is basically the main difference of BTC and ETH: Satoshi disappeared. No one can arrest him. No one can coherce him

He can't say bullshit in TV because he basically doesnt exist anymore!!

He was very wise in his decision to disappear.

[dkbit98]

Ethereum was a bit better when it was with Proof-Of_work algorithm, but I don't trust this coins since it was possible to reverse blockchain transactions.
I wonder why there was never any mixer that mixes ethereum with good volume and solid reputation.
Maybe it's pointless.

[examplens]

If Mr v died today what happens to eth?

Some governments will take control of ETH (it seems they already have it). Ethereum is ideal to be a semi-official token of some crypto-friendly country. Many have been announcing this for years, and this would be a complete solution.

[Faisal2202]

The centralised nature of eth is its real weakness.

If Mr v died today what happens to eth?

AND on the other hand if Mr v does not want censorship how come he could not stop it?

Basically the two questions I ask show a leadership or structural issue with eths centralised nature.

 Here is a third question if  a country grabs Mr v and locks him up what happens to eth?

There is no clear cut step up for eth and the fact that it was easily censored means Mr v is not in the full control he is appeared to be.

I EXPECT MANY more cracks in eth  for the next few years.

I agree with you on this that centralization is the real weakness, which means whenever the government wants ETH to be shut down they can do it not easily though, but if given unsupervised full power then they can easily shut down ETH due to its centralized nature. The question number one doesn't really raise any concerns about the centralized nature of ETH. I mean, they will just lie there and nothing bad will happen to those ETH if MR V dies today. As you said he can't control the censorship and can't make it stop.

I was not expecting any cracks, but let's see.