Blockchain under threat of sanctions due to third-party data in blocks

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A year ago there was a high-profile scandal related to bitcoin technology. One of the blockchain blocks contained links to child pornography, which cannot be deleted because of the features of cryptographic encryption and the decentralized management of the cryptocurrency network. This raises the question of who can upload third-party files to the blockchain and is it possible to find countermeasures?

How files are uploaded to blockchain

Five years ago, Interpol seriously investigated the problem, and scientists at RWU found for the first time forbidden data in the blockchain. Putting your own files on the blockchain can be done using 3 methods:

Through transaction programming.
Through the use of oracles.
Through special services.

Programmers can use coinbase data fields and transaction fields for strings no larger than 100 bytes. Scripting language is used for uploading data of larger size. It allows to work with files up to 60 Kb. Considering the bitcoin block size (1 MB on average), this method is able to seriously clog the cryptocurrency network, although it is necessary to pay a commission to miners for each transaction. If the user does not have programming skills and does not want to mess with mining, he can use special services to upload files to the blockchain. There are more and more such sites: CryptoSpeech, Satoshi Uploader, Eternity Wall, CryptoGraffiti, DocStamp and others.

Judging by the name, one can guess that CryptoGraffiti allows to place not only text but images too. Project founder Erich Erst thinks that his service doesn’t clog up the blockchain at all. Erst draws an analogy between using blockchain only for bitcoin transactions and using the Internet exclusively for publishing scientific articles and correspondence with relatives. His view is based on the fact that the blockchain’s advantage of not being able to delete the data recorded in it should please the community, not the other way around.

Accountability to the law

There is currently no precedent for criminal liability for uploading third-party data to blockchain. Relying on the laws of different countries, we can only speculate on the possible degree of liability for violators. The first issue for law enforcement is whether the use of blockchain is considered information storage, since the user does not keep files on his or her computer. Cryptocurrency researcher Arvind Narayanan notes that, legally speaking, links to a file and the file itself are not the same thing. Thus, it is not the blockchain that is responsible for the links, but the source of the illegal content. More often than not, it is located on the darknet.

Things are more complicated with images. As you know, all data in the blockchain is encrypted, so you can download a photo from a decentralized network only if you have the exact decryption instructions. Before that, the file cannot be identified at all and understand what it is: text, image or any other data format. An image in a blockchain is more of a steganography than the picture itself in its usual form. Steganography is a hidden method of storing data, first mentioned in 1499. This method involves keeping secret the very fact that there is hidden data.

The risk for the cryptocurrency network is that law enforcement will start blocking the use of blockchain as a tool for attackers under the pretext of combating illegal content. Storing full copies of the blockchain is reserved for full nodes of the network, but it is very difficult to imagine arresting 9623 people around the world because they are storing encrypted data that they cannot decrypt.

 

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The likelihood of Satoshi Nakamoto’s invention being recognized as malicious technology remains small, so blockchain-based data storage services are obliged to increase control over their users. The Money Button service has taken decisive steps in this direction, after which users of the app can be blocked or even arrested, as Money Button now transmits data to the police.

How to deal with illegal data

Cleansing the blockchain is only possible with a fork, but that’s too drastic a step to combat unwanted content. Blocking offending users will have no effect on blockchain content, and their followers will use other sites or find a way to upload files to the blockchain without the help of a third party. While there have been no court precedents, the extent of possible sanctions against bitcoin and other blockchain cryptocurrencies remains unknown. A more realistic threat is the inflated public outcry over the relatively new and not yet widely understood technology.

In any case, the positive side of blockchain’s immutability is bound to come to the defense of blockchain. Recall that blockchain was the first technology that embodied the concept of digital decentralization of data storage and recording. A real fight against corruption, an independent financial system, and a new level of trust in digital technology – all made possible by Satoshi Nakamoto’s ingenious invention, and links to forbidden data have been in the public domain for the third decade. Given the globally lost fight against the darknet, blockchain is not something to worry about.

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