Censorship-resistance may refer to a specific property of a cryptocurrency network. This property implies that any party wishing to transact on the network can do so as long as they follow the rules of the network protocol.
It might also refer to the property of a network that prevents any party from altering transactions on it. When a transaction is added to the blockchain, it’s propagated across thousands of nodes and added to the distributed ledger. Once the transaction has been added, it’s virtually impossible to remove or alter it, making it (and the network) immutable.
Censorship-resistance is considered to be one of the main value propositions of Bitcoin. The idea is that no nation-state, corporation, or third party has the power to control who can transact or store their wealth on the network. Censorship-resistance ensures that the laws that govern the network are set in advance and can’t be retroactively altered to fit a specific agenda.
While traditional financial institutions are in the hands of intermediaries, the Bitcoin network isn’t owned by any single entity. As such, it’s virtually impossible to censor transactions on it – in contrast, this isn’t the case when it comes to traditional finance. For example, if a person is deemed an enemy of an authoritarian state, the ruling government might freeze their account and prevent them from moving their funds. While Bitcoin is mostly used as an instrument for speculation, this use case is probably the most fundamental reason why it’s a substantial innovation.
It’s worth noting that censoring transactions on the Bitcoin network isn’t completely impossible, but rather extremely resource-intensive. The security model of Bitcoin heavily relies on majority rule. This means that a single entity could, in theory, garner enough hash rate to gain control of the network in a scenario called a 51% attack. The chances of this happening are rather slim, but it’s possible nonetheless.