Censorship Resistance

Like the continents and countries of the World, the Internet is broken up into regions. Internet backbone (Tier 1) providers who work closely with government regulators control the flow of traffic between these regions. These few large providers, who number a dozen or so globally (there is no official number) enter peering agreements and transmit agreements with each other and also Tier 2 and Tier 3 networks to remunerate one another for data transmitted. Tier 1, 2 and 3 providers can all serve as ISP’s (Internet Service Providers). Tier 1 networks try to operate with a settlement-free interconnection, also known as settlement-free peering. In other words, Tier 1 networks can exchange traffic with other Tier 1 networks without having to pay any fees for the exchange of traffic in either direction. However peering is founded on the principle of equality of traffic between the partners and so disagreements arise between partners in which usually one of the partners disconnects the link in order to force the other into a payment scheme. These payment schemed are known as transmit agreements. Negotiating transmit agreements takes time and the system of remuneration is far from perfect.

Relationship of Internet providers [1]

Tokenizing micro-payments on a blockchain with smart contracts whose peers relay traffic as a proof-of-work (proof-of-relay) could simplify or replace traditional transmit and peering agreements and save millions of dollars in litigation and settlement.

Governments can censor Internet content at their discretion and even prevent citizens accessing the Internet altogether, a power granted in part by the imbalance of power online, their relationship with Tier 1 providers, and the way in which traffic is routed on the Internet.

The government of Egypt shut down the four major ISPs on January 27, 2011 at approximately 5:20 p.m. EST. Evidently the networks had not been physically interrupted, as the Internet transit traffic through Egypt, such as traffic flowing from Europe to Asia, was unaffected. Instead, the government shut down the Border Gateway Protocol (BGP) sessions announcing local routes. BGP is responsible for routing traffic between ISPs Only one of Egypt’s ISPs was allowed to continue operations. The ISP Noor Group provided connectivity only to Egypt’s stock exchange as well as some government ministries. [2]

The Web too is rapidly centralizing into a handful of data silos such as Facebook, Amazon, Google, Netflix, Apple and Microsoft. Billions of users today now beholden to the mega-companies that dominate the online space.

In 2019 Internet users across the world enjoy little to no privacy, seldom control their own data, are routinely surveilled, and are commodities to the companies who monetize their private information.

“No right of private conversation was enumerated in the Constitution. I suppose it never occurred to anyone at the time that it could be prevented.”



- Whitfield Diffie (co-inventor of public key cryptography, adviser to NKN)

In December 2016, the Federal Court of Australia ordered more than fifty ISP’s to censor 5 sites that infringe on the Copyright Act.

As if all that weren’t bad enough Net Neutrality concerns look set to make matters worse. Put simply the mega-companies that dominate the online space do deals with Tier 1 providers and secure themselves a “fast lane” for traffic, while the competition is left struggling in the slow lane.

Even Bitcoin, often dubbed the “Internet of Money”, has centralized into a handful of mining silos such as BTC.com, Antpool, Slush, F2pool and ViaBTC. The manufacture of the specialized hardware used to mine bitcoin is monopolized by a small cartel of vendors.

More than 90% of the overall Bitcoin hash power is owned by less than 20 companies. In June 2018 Bitmain had attained approximately 42 percent control of the Bitcoin network hashrate.

Since mining operations are centralized, the Bitcoin network relies on full nodes for censorship resistance. There are around 10,000 full nodes today. In Q1 2019 Bitcoin’s mining proof-of-work consumes as much energy as nation-states.

Does it matter if the Internet and Bitcoin are centralizing?

The answer lies in something called Censorship Resistance. Censorship resistance describes the property of a distributed (Bitcoin) or decentralized network (Internet) to withstand unauthorized modification, deletion or censorship by third parties. Censorship resistance can also be used to describe how easily people can participate in, and use, the network. If people cannot easily join the network it is not censorship resistant. By sharing data (or the blockchain) across many computers a networks’ resistance to censorship and deletion increases.

People in the Bitcoin community know about the importance of censorship resistance, which is why many of them run non-mining full nodes to preserve blockchain data, and do so at their own expense and without financial reward. Unlike mining nodes, the network does not incentivize full nodes, and so the game theory which keeps mining nodes honest does not strictly apply to full nodes. Lacking proper incentive also means the full node count has not increased in years. Today they number around 10,000 worldwide, roughly the same number of full nodes as 2014, as revealed in this Jameson Lopp blog from the same year (Lopp is the creator of Statoshi, a fork of Bitcoin Core that analyzes statistics of Bitcoin nodes) [3]:

Recently I’ve been trying to quantify the strength of Bitcoin’s infrastructure with respect to its full nodes. I keep tabs on the number of full nodes via Bitnodes, which recently updated its crawling algorithm to be faster and more accurate. This update caused the number of reported nodes to drop by an order of magnitude, from more than 100,000 to fewer than 10,000 because it no longer counts nodes that do not accept inbound connections. Is this a cause for concern?

In 2016 the number of full nodes dropped below 5,000.

It is a surprising and not well-known fact that mining pools are not by design required to keep a copy of the blockchain, although they generally do since it in their own interest to validate the transactions themselves before adding them to a block.

Is 10,000 nodes enough? In “The State of the Bitcoin Network”, Lopp continues:

While the network is quite healthy, we still desire more nodes in order to further decentralize the network, disperse trust, and make it more expensive for a malicious entity to conduct a successful Sybil attack.[4]

Yet the number of full nodes is the same as it was five years ago in 2014 when Lopp made this comment. The hardware requirements for running a node are high, and the knowledge and dedication required to run one non-trivial. Badly configured full nodes will end up “leeching” network resources and hinder network performance. Paying full node operators has been rejected as a viable strategy, in part because it changes “the contract for distributing transaction fees” and does not guarantee non-malicious behavior.

Instead of seeking to pay node operators, which would be an incredible engineering challenge that might result in disenfranchising miners due to changing the contract for distributing transaction fees / newly minted coins, the Bitcoin Core developers will seek to make it less technically challenging and less resource intensive for a user to run a node.[4]

Nick Szabo [5] discusses the importance of node decentralization in his speech at Ethereum Devcon1 from November 2016. In this clip Szabo states the “most diverse nodes” are the “most independent nodes”, and the “best nodes”. Diversity of node location (across many countries and continents) is is a better measure of censorship resistance than sheer volume of nodes.

With Szabo’s comments in mind we can look at bitcoin node distribution, and see that 40% of nodes are hosted on servers belonging to six companies based in only three jurisdictions: the USA, Canada and Germany.