Censorship of transactions in the Bitcoin network leads to a long-term decrease in profitability, making the network vulnerable to competition. The argument is based on the following considerations: 1. Economic Incentive and Profitability: - Miners are financially motivated to include transactions with the highest fees in their blocks. - By censoring certain transactions (e.g., images or data classified as spam), miners forgo potential profit by not including the highest-paying transactions. - In the long run, this practice reduces miners' revenue, and consequently, the funds available for investment in hardware and network security. 2. Competition and Network Effect: - An alternative network that does not engage in censorship and accepts all transactions could fill this gap, thereby generating more transaction fees. - This network could grow faster due to being more profitable and having more resources for development and infrastructure. - Even if, initially, the majority of users (e.g., 90%) support the censoring network, the uncensored network could gain significance over time as it becomes more economically attractive. 3. Long-term Consequences: - If the uncensored network gains enough market share, it could eventually overtake the original Bitcoin network. - To maintain its dominance, the Bitcoin network must remain the most efficient and economically attractive network. This means maximizing the incentive for miners by not censoring transactions, thus ensuring the highest economic benefit. In summary, censorship not only contradicts the principles of Bitcoin but could also weaken the network in the long run by making it less profitable and more susceptible to competition. Censorship resistance is therefore a crucial feature that contributes to the long-term stability and dominance of the Bitcoin network. #bitcoin #fees #centralizing

Why bitcoin and PoW is so great: Proof-of-Work is considered the best system because it is decentralized and cannot be centralized. In other systems, there is often an incentive to centralize in order to reduce costs. With PoW, as used in Bitcoin, computational power is required, which can only be generated using electricity. Since electricity is distributed globally, supply and demand determine where it is profitable to set up computers (miners). Attempting to centralize mining generally leads to higher electricity costs because fast increased energy demand drives up the price. This makes it more expensive for miners to operate. Miners do not need to be in a specific location to operate, and the computational power is the same for everyone. This means that the only factor driving up operating costs is the price of electricity. When energy prices rise, mining becomes more profitable in other locations with lower electricity costs. The decentralization of power supply and the associated cost differences effectively prevent the centralization of the mining process. Additionally, if someone tried to attack the network by centralizing it, this would incur significant costs. These high costs make such an attack unsustainable in the long run, as the attacker would need to spend more money than they could gain from the attack. Therefore, the system naturally leads to decentralization. #bitcoin #mining #energy