Much is being discussed on Twitter and Reddit about the censoring of transactions on Ethereum. As can be seen on MEV Watch, around half of all blocks, as of right now, follow the OFAC recommendations, censoring transactions against Tornado Cash and similar.
It doesn’t take much imagination among Ethereum haters and Bitcoin maxis to declare this as proof of the failure of Ethereum, but is it really?
Instead, I believe we’re seeing two things play our here:
- In a decentralized system, you can’t force me to produce blocks with or without censorship. I, as the block producer, pick who I want to censor.
- More importantly, we’re still not quite there with blockchain tech, because this is comparable to using telnet when connecting to your server.
If you don’t know what telnet is, it’s basically comparable to connecting to your bank without encryption. Back when I was way younger I used to run a IRC bot, and that ran on a shell on a server. I paid for this shell, and to access it I used telnet. SSH wasn’t available.
Today, using telnet in any context would be considered horrendous, a sackable offense if you’d be working as a dev or ops person. But this is where we’re at with blockchain right now. We don’t really have much of an alternative other than publicly broadcast our DeFi transactions for the whole world to view.
Obviously that’s not good enough, and leads to the type of censorship we see today. Salvation will be upon us soon enough tho, with the emergence of zkEVMs, validiums, and more mainnet bandwidth. Keep that in mind as we progress on this journey, as it will radically alter the way we use blockchains, giving us the benefits without the privacy issues seen today.