According to a research paper published by researchers in Germany in March 2018, the Bitcoin blockchain may be hosting links to illegal content, including three specific instances of child abuse. The authors of the paper, who come from the University of Aachen and Frankfurt, have stated that while there is a lot of illegal content present on the blockchain, a small percentage of them carry strict penalties in most jurisdictions worldwide.
Non-Arbitrary Data on Bitcoin’s Blockchain
The Bitcoin blockchain is primarily used as a ledger that records and stores a permanent record of transactions as they occur throughout the network. Over the years, however, some users have also been embedding arbitrary, non-financial data while broadcasting their transactions.
Most of the data that can currently be found and perused on the blockchain is relatively harmless. The vast majority of it includes quotes from famous personalities and cryptic messages to an individual or the entire cryptocurrency community. Links are pretty common too and were reportedly even used to showcase the scalability debate by including Reddit threads.
During their research, however, the researchers found that:
“there is also content to be considered objectionable in many jurisdictions, e.g., the depiction of nudity of a young woman or hundreds of links to child pornography.”
According to them, the content is a significant threat to the future of bitcoin. “Since all Bitcoin participants maintain a complete local copy of the blockchain, these desired and vital features put all users at risk when objectionable content is irrevocably stored on the blockchain. This risk potential is exemplified by the (mis)use of Bitcoin’s blockchain as an anonymous and irrevocable content store.”
Nevertheless, the researchers explore both the benefits and costs of storing non-arbitrary data on the blockchain, stating that:
“…each insertion method has distinguishing benefits: OP _RETURN. Augmenting transactions with short pieces of arbitrary data is beneficial for a wide area of applications. Different services use OP _RETURN to link non-financial assets, e.g., vouchers, to Bitcoin’s blockchain, to attest the existence of digital documents at a certain point of time as a digital notary service, to realize distributed digital rights management… Large-scale Data Insertion. Engraving large amounts of data into the blockchain creates a long-term non-manipulable le storage. This enables, e.g., the archiving of historical data or censorship-resistant publication, which helps protecting whistleblowers or critical journalists…”
Of course, the mainstream media is not interesting in having a discussion weighing the costs and benefits of this peculiar functionality of cryptocurrency.
Bitcoin is a Public Good
The first message recorded on the blockchain was actually part of the first few transactions on the bitcoin network, in the Genesis block. The creator of the cryptocurrency, Satoshi Nakamoto, is famously known to have included the message, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
The total number of instances wherein transactions on the blockchain also contained non-financial data was found to be around 1600, or 1.4 percent of all transactions to date. It is important to note that the blockchain, being immutable in nature, does not allow for the removal of data once added.
Mainstream media has jumped on the chance to put the words pedophile and child porn next to bitcoin (as they have done in previous years), but the fact is, the blockchain network is a public good – by definition it is non-excludable.
Would we ban parks or sack the warden if someone graffitied a hyperlink to questionable pornographic content in a public park? No. Is a criminal prevented from calling the police if they are a victim of a crime? No. Like the police and public parks, bitcoin is a public good. While no explicit content is directly observable on the blockchain, it has been suggested by some in the Bitcoin community this narrative could be used to exert pressure on node operators, since they have a full copy of the blockchain.
Bitcoin ‘Graffiti’ has Been Around for a Long Time
In a BTCManager interview with the founder of Bitcoin Strings, a project aimed specifically at decoding such hidden messages, he said: “the blockchain has various sorts of interesting stuff in it; code, images, quotes, illegal numbers, ASCII art, encrypted data, etc.” When asked about the overall utility of the content that can currently be discovered, the founder, Antti, also said, “I don’t think the importance can be ranked. It’s just a pretty permanent storage, and people have used it in various ways. There is some functional code written in the blockchain. For example, a script to turn blockchain-embedded images to actual images.”
While anyone has the ability to store their own message on the blockchain, it is becoming increasingly expensive to do with the rising cost of transactions and limited free space in each processed block. Nevertheless, given sufficient motivation, Antti believes that anyone can still include their own message on the blockchain. He added, “However, it’s not encouraged as it’s bloat. Everyone has the responsibility not to bloat the blockchain.”
Since most cryptocurrency blockchains are fundamentally alike, the ability to add arbitrary data is not exclusive to bitcoin alone. Other cryptocurrencies, including Ethereum, Bitcoin Cash, and Litecoin, are all susceptible to the same problem. The advent of a permissionless technology brings freedom to all but also forces us to confront the difficult fact that no one can be excluded, even including sex offenders.