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Bybit Learn
Dec 21, 2020

Censorship Resistance

Censorship resistance in blockchain networks prevents external parties from modifying the transactions on the network. It’s designed to promote transparency and decentralization in crypto.

What Does Censorship Resistance Mean in Crypto?

If you’ve been in the crypto space for a while, then you might have heard of the term censorship resistance. The term has several meanings.

One, censorship resistance can refer to the decentralized nature of the blockchain network. Decentralization is the transfer of control from centralized systems to distributed networks. With decentralization, there is no single authority to censor transactions on blockchain networks.

Censorship resistance can also refer to blockchain’s immutability feature. The feature makes it impossible for anyone to remove or alter transactions once validated and placed in the blockchain. Any change on the network will have to be approved by all nodes in the network.

Censorship resistance is one of blockchain’s greatest selling points. The idea is that no nation, corporation, or third party can control who can store or transact their wealth on the network. There is no single authority dictating operations on the distributed network.

Censorship resistance ensures that the laws that govern the blockchain network are set in advance and can’t be changed by anyone without consensus. All participating nodes on the network have to agree for any change to take place on the network. The majority rule applies.

Compared to centralized systems, decentralized systems have become much more preferable because of censorship resistance. 

Traditional centralized systems have their advantages, which is why they have lasted this long. However, they have their setbacks. For example, since they heavily rely on third parties or intermediaries, they can easily be censored when needed.

For example, with centralized systems, it is easy for governments to freeze individuals’ accounts if they are deemed enemies of the state, preventing them from moving their wealth overseas. With Bitcoin, it is almost impossible for governments to employ such tactics to get people to submit to authoritarian rule. 

It is worth noting that censoring transaction on blockchain networks is not completely impossible. It is possible, but it is quite resources intensive. The resources needed to pull off such an intervention might be more than the profits to be gained. 

51% attack

Blockchain’s security model relies heavily on majority rule. This means, in theory, if an individual or individuals were to seize control of a majority share of a network’s resources (more than 50% of the network’s mining hash rate), they would be able to gain control of the network.  This is what is known as a 51% attack. In such an attack, the attackers would be able to prevent new transactions from gaining confirmations and reverse their own transactions, enabling double-spending. 

The chances of a 51% attack on large networks such as Bitcoin’s are slim but not impossible. For smaller networks with a lower hash rate, things get a little easier. For example, in August 2016, Krypton and Shift, two blockchains based on the Etherum network, suffered a 51% attack.

In May 2018, Bitcoin Gold suffered a 51% attack, which resulted in the attackers double-spending for several days before eventually stealing more than $18 million worth of Bitcoin Gold. 

Censorship resistance networks offer a new and improved way of conducting business. Without a single authority in control of everything, people have a way of enjoying some freedom in their day to day transactions.