Bitcoin Privacy at Risk: Ocean Mining Accused of Censorship

• Ocean Mining stands accused of censoring BTC privacy transactions.
• Bitcoin core dev attributes the issue to a bug.
• Samourai Wallet is adamant that Ocean Mining is deliberately blocking transactions.

Bitcoin was originally designed as a decentralized, permissionless system for transferring value. However, corporate interests have interfered with Satoshi Nakamoto’s vision of an electronic cash system over time. Recently, Jack Dorsey-backed Ocean Mining has been accused of jeopardizing Bitcoin’s ethos by censoring privacy transactions.

Bitcoin Ethos Under Threat

In a recent tweet, Samourai Wallet (SW) sounded the alarm on Ocean Mining, jeopardizing Bitcoin’s ethos. SW stated that Ocean Mining was responsible for censoring specific Bitcoin transactions, namely Whirlpool CoinJoin and BIP47 notification transactions. SW attributed this policy directly to Dorsey and Bitcoin core dev Luke Dashjr.

Whirlpool is a SW development that links to the CoinJoin mixer, which obfuscates address inputs and outputs. While BIP47 is another SW development that enables randomized different wallet addresses from the same “PayNym” QR code.

Dashjr distanced himself from the allegations by saying that the censored transactions relate to a bug in the Whirlpool protocol. However, SW refuted this, stating that past Whirlpool transactions presented no problem. SW added that deliberately censoring privacy transactions is a “very slippery slope” for Ocean Mining and its client node, Bitcoin Knots to take.  

To support privacy on the Bitcoin network, SW called on miners to consider redirecting their hash power to other mining pools. 

Network Privacy 

The Bitcoin network is a pseudonymous open public ledger. However, privacy is compromised by chain analysis firms that connect transaction endpoints back to real identities using data provided by KYC/AML-compliant exchanges. 

Nonetheless, privacy can be enhanced by initiatives such as mixers, which combine inputs from various users into a single basket to break chain analysis assumptions. This gives no definitive way to track the exact previous owners for any output. 

Similarly, randomizing new addresses while retaining the same PayNym code makes sending and receiving Bitcoin easy while adding an extra layer of privacy by eliminating the use of a static address.

On the Flipside

• Dashjr has a history of advocating BTC censorship, including proposals to block Ordinals.
• In November, Dorsey led a seed round raising $6.2 million for Ocean Mining’s parent company, Mummolin Inc.
• Dorsey has built a positive reputation for cheering Bitcoin’s benefit to humanity, making Ocean Mining’s censorship confusing.
• SW implied that “state actors” colluded with Ocean Mining.

Why This Matters

Ocean Mining’s recent actions of enacting transaction censorship set a dangerous precedent for Bitcoin’s privacy and fungibility. The censorship actions pose new questions about Dorsey’s intentions for the Bitcoin network and how his involvement may impact the future of the cryptocurrency.

Read more about the ongoing dilemma between privacy and security here:
How Worldcoin Made Web3 Users Choose Between Privacy and Security

Discover the latest in Do Kwon’s bid to evade justice here:
Do Kwon Mounts Last Ditch Appeal Against Extradition