What Miners Can and Cannot Change: The Unbreakable Rules of Bitcoin's Consensus

Increasing block size is the naive path to scalability, but it's a direct attack on decentralization. Larger blocks require more storage and bandwidth, pricing out smaller validators and centralizing network control.

• Centralization Pressure: Larger blocks favor professionalized mining pools with enterprise-grade hardware.
• Security Trade-off: A more centralized validator set is more vulnerable to collusion and external coercion.
• Network Effect: This is the core debate behind Bitcoin's SegWit fork and Ethereum's move to rollup-centric scaling.

Proof-of-Work's probabilistic finality is a feature, not a bug. Miners cannot magically create instant, deterministic finality without sacrificing the core security model. Faster block times increase orphan rates and network instability.

• Nakamoto Consensus: Security scales with the depth of confirmations; 6 blocks is the Bitcoin standard for high-value tx.
• Orphan Rate Risk: Shorter intervals lead to more chain reorganizations, undermining settlement guarantees.
• Alternative Path: This constraint is why Solana opts for centralized hardware and Ethereum migrated to Proof-of-Stake with Casper FFG for faster finality.

A miner cannot unilaterally modify the protocol's state transition function. They can only order transactions and attempt to build on the longest chain. Changing rules requires a hard fork and overwhelming consensus, as seen with Ethereum's DAO fork and Bitcoin's UASF movement.

• Immutability Anchor: The ledger's history is cryptographically immutable; rewriting it requires a 51% attack.
• Governance Reality: Protocol upgrades are political processes, not technical mandates for miners.
• Fork as Escape Hatch: This constraint defines the market's ultimate arbitration between Bitcoin Cash and Ethereum Classic.

Miners can secretly mine a longer, alternative chain to double-spend or censor transactions after they appear confirmed. This is the canonical 51% attack, but profitability depends on exchange finality policies and the value at stake.

• Key Risk: Exchanges with shallow confirmations (e.g., 1-3 blocks) for high-value deposits are primary targets.
• Key Constraint: Attack cost scales with hashrate rental prices and lost block rewards from the public chain.

Miners (and validators) can reorder, insert, or censor transactions within a block to capture arbitrage, liquidations, and sandwich trades. This is a consensus-level exploit of user transactions.

• The Problem: Creates toxic order flow, degrading execution for regular users and centralizing block building.
• The Constraint: Cannot steal already-confirmed funds from a wallet, only manipulate pending txns. Solutions like Flashbots SUAVE, CowSwap, and MEV-Boost aim to democratize access.

Mining pools can exclude transactions from specific addresses (e.g., sanctioned Tornado Cash users) from blocks. This violates neutrality and can be enforced by regulatory pressure.

• The Problem: Turns miners into regulatory gatekeepers, undermining permissionless access.
• The Constraint: Cannot alter blockchain state or prevent other miners from including the txns. Proposer-Builder Separation (PBS) and crLists are architectural responses to pool-level censorship.

Miners have zero power to change the protocol's fundamental rules: token supply, block reward schedule, or the validity of past blocks. This is enforced by full nodes which reject invalid chains.

• Key Limit: A miner can only propose a new block; network consensus is required for adoption.
• Key Defense: User-Activated Soft Forks (UASF) like Bitcoin's SegWit demonstrate node sovereignty over miner opposition.

Miners cannot fundamentally alter the block size or block time defined by the protocol's consensus rules. This creates a fixed-supply market for transaction inclusion, leading to volatile fee auctions during congestion.\n- Constrained Resource: Block space is the ultimate scarce commodity.\n- Fee Market Dynamics: Miners are pure profit-maximizers for ordering within this constraint.

A miner's primary power is transaction ordering within a block. This grants them exclusive rights to Maximal Extractable Value (MEV), from simple fee prioritization to complex arbitrage and liquidations.\n- Revenue Stream: MEV can exceed >100% of standard block rewards.\n- Protocol Risk: Naive designs leak value; systems like CowSwap and UniswapX use intents to mitigate.

Miners can censor transactions by excluding them from blocks. While economically irrational in a competitive market, regulatory pressure (e.g., OFAC sanctions) can force centralized mining pools to comply, threatening credible neutrality.\n- Network Risk: Centralized mining/staking pools create single points of failure.\n- Solution Space: Requires proposer-builder separation (PBS) or encrypted mempools.

Miners cannot change protocol rules unilaterally; they can only signal readiness for soft forks. Ultimate upgrade power resides with full nodes and the social layer. This prevents miner capture but introduces coordination overhead.\n- Governance Check: A 51% attack can reorganize chains but cannot force new rules.\n- Key Insight: Protocol design must secure both cryptographic and social consensus.

Miners can attempt chain reorganizations to revert blocks and steal MEV—a time-bandit attack. While costly, it's a rational strategy if the stolen value exceeds the orphaned block reward, undermining settlement finality.\n- Finality Risk: Especially acute in Proof-of-Work chains with probabilistic finality.\n- Protocol Defense: Requires economic penalties or finality gadgets.

Proposer-Builder Separation (PBS), as pioneered by Ethereum's roadmap and implemented via MEV-Boost, formalizes the miner/validator's role. The proposer simply chooses the highest-paying block header, outsourcing complex ordering to competitive builders.\n- Efficiency: Unlocks >90% of MEV for validators via open markets.\n- Censorship Resistance: Enables crLists to force inclusion of sanctioned transactions.