- The mining pool of DMG’s Blockchain Solutions subsidiary, Blockseer, will censor Bitcoin transactions to comply with regulations.
- Monero developer Riccardo Spagni expects greater control over Bitcoin transactions and proposes an increase in network privacy.
A few weeks ago, DMG Blockchain Solutions announced the creation of a new mining pool. Part of its US subsidiary, Blockseer, the mining pool was created to meet and “exceed” the US government’s Office of Foreign Assets Control (OFAC) regulations regarding Bitcoin transactions.
Therefore, Blockseer’s mining pool will only validate transactions from addresses that are not blacklisted by the OFAC and will require its users to go through a Know Your Customer (KYC) process. In this way, DMG seeks to “provide the highest level of transparency, verifiability and corporate governance” to the Bitcoin network.
DMG’s mining pool will use a corporate data collection tool called Walletscore. This tool will be used in conjunction with the information provided by OFAC to filter out any transactions related to theft, fraud, money laundering or other illegal activities. Adrian Glover, CTO of DMG, said:
We built the pool on the technology platform that drives our mine management platform, thus creating a unified user experience for our customers and allowing us to quickly add functionality to both products. In the near-term future, we will deliver audit-ready reports and irrefutable evidence of our customers’ mining revenues, right from our user interface. For DMG, the pool launch is just the beginning, our team will continue to work hard to add all the revenue, cost tracking and projection information miners are looking for.
Migration of bitcoin miners, less user privacy?
DMG’s initiative could follow a reorganization trend of mining pools globally. These have a large presence in Asia, particularly in China. However, the Asian giant continues to put pressure on the cryptocurrency market and its related businesses.
In a recent report, Wu Blockchain said miners in China suffered huge losses after having trouble paying their electricity bills. The report States and makes the following prediction:
(…) A large number of bank cards were frozen and even suffered heavy losses. This will accelerate the transfer of cryptocurrency mining from China to the United States, Kazakhstan and other countries.
Wu Blockchain also reported the attack that exchanges have suffered and entities that, despite their close relationship with the Chinese Communist Party (CCP), have been hit by the tightening of cryptocurrency measures. In this sense, more mining pools could be encouraged to form US-based mining pools similar to Blockseer.
Monero’s former chief maintainer, Riccardo Spagni, did it She said it is only a matter of time before “most mining pools are forced to carry out these filtered transactions”. Spagni proposes to use solutions like p2pool focusing on Stratum v2 and adding more privacy to Bitcoin.
Hacktrophy co-founder Juraj Bednar believes governments could take the first step towards censoring Bitcoin by implementing oversight measures for mining pools. Bednar says miners have greater incentives to follow regulations than oppose them due to the heavy investments they make in mining hardware, infrastructure, data centers and taxes. Therefore, he adds:
If the government comes in and says you can’t mine the blocks that spend these UTXOs, or you’ll lose a bank account, exchange account, work permit, or go to jail for money laundering, most big miners would fit. Blockseer is just a prime example.