German researchers have uncovered hundreds of links to illegal content and child porn on bitcoin blockchain that could potentially make mere possession of it illegal in many countries.

The bitcoin blockchain is an immutable distributed ledger of all transactions that take place within the network. But it also makes it possible for the users of the network to save text or any other files on the ledger.

 

The Implications

This in effect implies that bitcoin miners, who possess the entire bitcoin blockchain in order to verify transactions, have child pornography among other illegal content on their computer hard drives.

According to the researchers, a review of all blockchain transactions at a time revealed a total of 1,600 files, which equates to 1.4% of the entire bitcoin blockchain, which have content that does not in any way relate to the cryptocurrency.

At least eight of these files contained inappropriate sexual content, one of them being believed to be a nude image of an underage female. Two files had several hundred links to child porn websites, a majority of them on the dark web.

They also say that there could be other problematic content if at all any material on the bitcoin blockchain violates privacy and copyright laws.

Transacting in the digital currency does not necessarily require an individual to have a copy of the bitcoin blockchain. But in the case of miners, who are indispensable for the blockchain to work, the report could have legal implications.

“Our analysis shows that certain content, e.g., illegal pornography, can render the mere possession of a blockchain illegal. This especially endangers the multi-billion markets powering cryptocurrencies such as bitcoin,” the research report said.

“Since all blockchain data is downloaded and persistently stored by users, they are liable for any objectionable content added to the blockchain by others.”

 

Immutability – A Double-Edged Sword

The main challenge with this objectionable content arises from the immutability of the blockchain. Once blocks containing any sort of data are added to the chain, they cannot be removed without compromising the entire structure.

This concept is what makes the technology ideal for financial transactions as it precludes the possibility of double spending that would ordinarily arise from a system with no central gatekeeper.

In this regard the report goes on to add, “Since all bitcoin participants maintain a complete copy of the blockchain, these desired and vital features put all users at risk when objectionable content is irrevocable stored on the blockchain.”

“The possibility to store non-financial data on cryptocurrency blockchains is both beneficial and threatening for its users.”

Satoshi Nakamoto, the originator of bitcoin was the first to leave non-financial data on the original block of the chain: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

Many other users have since that time followed in his footsteps, leaving benign messages for their loved ones and tributes to Nelson Mandela among others. But illicit content on the bitcoin blockchain raises a whole new set of legal challenges for its users globally.

Beryl is a passionate writer who is fascinated by blockchain technology. She has a Bachelor’s degree in Linguistics and Communication. When she’s not busy catching up on the latest crypto trends you’ll find her in the kitchen trying out a new dinner recipe. Contact her at [email protected]