Can collective mining pools refuse to recognize a mining block mined by a specific miner?

Question

This is a continuation to the question: Can a bitcoin transaction from a specific bitcoin address be banned? (via mining pools).

Suppose Satoshi Nakamoto sends bitcoins from one address to another, and some mining pools would refuse to add that specific transaction to the mining block (Considering China has 81% total bitcoin hashrate with their pools combined). However a miner/mining pool adds Satoshi's transaction to the block they mined.

But, other mining pools had a different idea. They would not accept the version of the blockchain where Satoshi's transaction is in that specific block.

Essentially the other mining pools are calling a "fork" where they don't recognize the block where Satoshi did a transaction. Would it be against bitcoin protocol? If they somehow get away with it, considering they have the hashing power, what would happen to the other miners? Would they accept the fork or just go along with it?

Answer 1

What you are describing is essentially a majority attack. A miner (or group of colluding miners) with a majority of hashpower can censor arbitrary transactions, and blocks that include them. This question has more info about what an attacker can do.

Crucially: a majority of hashpower can create blocks at a faster rate (on average) than the minority. So if the majority decides to not build upon a block that the minority found, they can reliably outrun the minority, by simply mining their own chain, and ignoring blocks found by the minority.

Essentially the other mining pools are calling a "fork" where they don't recognize the block where Satoshi did a transaction. Would it be against bitcoin protocol?

I wouldn't say it is "against the Bitcoin protocol", but it would be against the financial incentives which keep miners 'honest' (ie, not attacking the chain to censor transactions / blocks). Ultimately, the protocol does specify that the most-work chain is valid, so this becomes a tricky question about what the social understanding of the consensus rules really is.

If they somehow get away with it, considering they have the hashing power, what would happen to the other miners? Would they accept the fork or just go along with it?

A majority-attacker can ignore any blocks created by the minority, and if they do so, there isn't anything the minority can really do about it. Enacting the attack is extremely costly though, the financial incentive to attack would have to be unbelievably large in order to outweigh the cost. So I think that simply censoring one of Satoshi's transactions would not be worth the cost of the attack.