Last September we here at the Bent warned of an interesting social attack vector that was popping up that we believe you freaks should be keeping an eye on; OFAC/FATF/[insert evil alphabet soup regulatory body here] compliant mining pools. Well, fast forward to this morning and it seems like we have the first "OFAC compliant" block that was mined by a pool controlled by the publicly traded bitcoin mining company, Marathon Digital Holdings.
Marathon's attempt to create a "clean", "regulatory compliant" pool is nothing more than just that, an attempt. It is literally impossible to create an regulatory compliant pool unless you have enough hashrate to continually reorganize the chain to remove blocks that do include transactions the regulators don't want to happen. Marathon's very sad and small pool certainly isn't going to be able to accomplish this. The only thing produced from Marathon pool's mined block today was a pure virtue signal. They did nothing to comply with OFAC regulations. In fact, one can easily make the argument that they are helping to facilitate transactions that are "not approved" by regulators because the addition of the block they mined this morning adds an extra block of security to "unapproved" transactions in previous blocks. Here's a good thread that dives into this:
As Jay points out, the derelicts over at Marathon Digital Holdings have a fundamental misunderstanding of how the Bitcoin network actually works. They've accomplished nothing with this move outside of prove that they are bad actors who should be ridiculed and avoided. Bitcoin was created to bring a free and open source peer-to-peer digital cash system to the masses as an alternative to a corrupt central banking and political system. Onerous regulations that cause more harm than good by forcing individuals to give up very intimate personal information that eventually puts them in harm's way when databases holding that intimate information are breached. On top of that, the laws and regulations that corrupt governments attempt to force on individuals are subjective.
As we dive into this situation further, we'll find that Marathon wasn't even filtering transactions and may have actually facilitated the movement of UTXOs to a Hydra, a dark net market.
This move from Marathon was nothing more than a weak virtue signal to curry favor with regulators and, I am guessing here, attempt to establish a premium on their mined coins by labeling them as "OFAC compliant". Something similar to the "blood-free bitcoins" that idiot Kevin O'Leary has been screeching about for a couple months now. These people don't understand how Bitcoin works and are doing nothing more than to confuse people about what the protocol makes possible and potentially increase the cost of compliance as mining pools may be forced to hire legal counsel to combat false claims.
Oh look, the Iranian central bank doesn't understand how Bitcoin works either... Shocker.
These idiots will learn in due time. Here's to hoping their loud virtue signaling doesn't confuse regulators into actually believing they can regulate Bitcoin at the protocol level. Who knows though? Maybe Bitcoin needs to fight this fight at this current juncture to further prove its value prop and put all of this nonsense behind us for good.
Left over shredded pork over two over easy eggs is a delicious lunch!