There is evidence that the second largest Zcash mining pool is censoring shielded (private) transactions. If more pools begin censoring shielded transactions it would make the privacy coin “mostly unusable,” according to one analysis.
Mining pool censorship
Lev Dubinets, a former software developer at AWS, noticed that F2Pool—the second largest Zcash mining pool, which controls 18 percent of the network hashrate—has been censoring private transactions since April 2017.
According to Dubinets, out of more than 86,000 shielded transactions year-to-date F2Pool only mined 120 of them. Given the pool’s hashpower it should have mined roughly 15,000 shielded transactions. These numbers indicate that F2Pool is likely opting not to mine shielded transactions.
“Shielded transactions are underrepresented by F2Pool by three orders of magnitude,” stated Dubinets.
Reason for excluding shielded transactions
There are a few theories as to why F2Pool is choosing not to include shielded transactions in mined blocks. Dubinets speculates that it could stem from regulatory concerns, but even that seems unlikely. Miners normally are incentivized to include as many fee-bearing transactions as possible in a mined block.
Reuben Yap, the COO of privacy coin Zcoin, theorizes the choice could stem from fundamental challenges related to processing shielded transactions.
“My initial guess was that F2Pool engineers determined that not processing shielded transactions gave them some advantage in mining blocks (in a similar vein to mining empty blocks). Or that it was something to do with not wanting to deal with the complexities of verifying the zk proofs. Wang Chun’s recent post on Twitter indicates it to be the latter”
In response to inquiries on potential censorship, Wang Chun, the owner of F2Pool, implied the exclusion was out of laziness rather than malice.
The original ZEC pool I wrote in 2016 didn’t include any tx only empty blocks, not coz of censorship, but I was too lazy…