Guide: Censorship Resistance
On Monday 14 February 2022, for the first time in Canada’s history, the government declared a public order emergency, invoking powers to deter political protest. The government used centralisation to punish protestors by freezing their bank accounts and insurance policies. These “emergency powers” are were utilised, without a court order, against people who had not been charged with any crime. These events serve to highlight the extreme importance of decentralisation and censorship resistance.
The underlying point: governments can use “emergency” powers to block access to individuals' funds held in bank accounts and centralised cryptocurrency providers.
Kraken’s CEO, Jesse Powell was asked whether the exchange would be forced to comply with a police order to suspend access to assets without a court procedure:
ent/uploads/2022/02/Screenshot-2022-02-21-at-11.36.42-300x178.png" alt="" width="502" height="298">DeFi offers safety and security in emergencies that traditional financial infrastructure cannot. Decentralised ledgers are censorship-resistant, enabling users to own their own funds. Censorship resistance means that no government, nation-state, or third party has the power to control who can store value or transact on a network. It ensures that the network’s governing laws are decided in advance and cannot be retroactively changed to suit a particular agenda.
Decentralised networks aren’t owned or managed by any single party or intermediary. So, it’s almost impossible to censor transactions. As we've seen in Canada, this is not the case in traditional finance. If an individual is regarded as an enemy of the state, the government may suspend their account and their access to funds.
This is a sign that no one is safe relying entirely on traditional financial infrastructure.
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