The Bitcoin Blockchain allows users to store and transmit files and information through transactions. It turns out somebody makes use of this non-primary option: a university study has made some startling discoveries on over 1600 files stored in the Bitcoin Blockchain.

A collaborative study from Germany’s Goethe and Aachen Universities revealed eight files containing sexual content, hidden inside the world’s largest cryptocurrency Blockchain. There are a total of 274 links to websites, 142 of which can only be accessed with Tor hidden services. The research notes:

“While five files only show, describe, or link to mildly pornographic content, we consider the remaining three instances objectionable for almost all jurisdictions.”

In essence, any user that has a Bitcoin full node is in possession of data that could potentially lead to criminal prosecution in “almost all jurisdictions”. Mainstream media outlets have jumped on this news, touting headlines slamming the Bitcoin Blockchain for storing child pornography. The Guardian, Fortune Magazine as well as the BBC carried stories along these lines, but they are both sensational and somewhat one-sided.

Can users even access this incriminating data?

Before we explore the legal ramifications, the first course of action is to understand how it is possible for users to send, receive and access this type of data on the Bitcoin Blockchain, and if there is a need, or even a possibility, to remove this type of content from the Blockchain once it has been inserted. Applied cryptography consultant and former Bitcoin Core developer Peter Todd spoke to Cointelegraph to shed some light on these questions.

Todd pointed out that his own investigation into all the links to child pornography websites found in the Blockchain revealed that they are dead, having been published years ago. Even if the websites were still alive, Todd says it’s extremely difficult for the average user to access this data: “You need special decoding tools to be able to extract the data and make sense of it.”

Bitcoin wasn’t designed to publish data

Another pertinent point made by Todd is that the Bitcoin protocol was not designed to publish data. Furthermore it is expensive to do so, which invariably acts as a natural deterrent factor for people not to publish data:

“Bitcoin wasn't designed to do this. The tools in question make use of the unavoidable fact that any publicly auditable ledger that the public can interact with can also be leveraged to publish data. This is an unavoidable fact of life, because the entire purpose of being publicly auditable is to distribute data so the public can verify it.”

But how can we avoid this ‘data terrorism’? If Bitcoin Core developers were forced to make amendments to the protocol, Todd believes the easiest solution would be to make it expensive for users to publish data on the Blockchain.

“What you can avoid is making it cheap to do so: Bitcoin's transaction fees naturally do this, as do aspects of how it's scripting system work. More general purpose chains like Ethereum have bigger problems here, as do chains where it's cheaper to transact on.”

Is it possible to remove the data?

One of the core capabilities of the Bitcoin blockchain is to make transactions immutable. The ledger cannot be changed once a transaction has been verified by the network. This essentially means that the data in question cannot be removed from the Blockchain. According to Todd, the illicit links are no longer live and they’re incredibly difficult to access.

The cryptography consultant believes this situation hinders progress, in that developers and users are being made to worry about the possibility of this type of data be stored and shared in the Bitcoin Blockchain.

“It's silly to be concerned about such ineffective means of publishing data. If we as a society allow this to be a threat, assholes will take advantage of it in numerous other contexts. Heck, I'd be a lot more concerned about Git repositories than Bitcoin - it's quite easy to hide very large amounts of data in Git commits. Do we want to live in a world where developers are forced to rewrite history repeatedly because someone snuck an illegal image into a git repo, in a way that's difficult to detect?”

Todd likens this to a builder being asked to demolish a section of a building, “because someone threw a vial of crack into an expansion joint crack that leads to an inaccessible space within the building.” Indeed, the average user can’t access the data, and the effort and resources it would take to alter these changes far outweighs any harm it could cause.

However the reality is the network users can still store this type of data. To that end, Todd admits it is an ‘unavoidable fact’, while reiterating that Bitcoin is one of the “most expensive publication mediums out there.” There are ways to make it more difficult for people to store this type of data in the Blockchain - but that would be an obstructive course of action:

“There are some technical measures that could make this even more expensive, but if the legal system criminalizes what Bitcoin does already, quite frankly it's making unreasonable demands.”

Can Bitcoin node operators really be prosecuted?

In order to understand the legal consequences of this, Cointelegraph spoke to US corporate attorney Dean Steinbeck. According to him, current legislation in the United States could mean that Bitcoin users could be held liable - but it’s not so clear cut:

“Possession of child pornography is a crime, though it is still unclear how child pornography laws apply to node operators who are not viewing or curating the data being stored. These laws were drafted to be technology agnostic, meaning there is no exception for Blockchain nodes, so its likely that node operators will be treated like other data storage providers, for example, Facebook, Amazon Web Services, Google, etc.”

Nevertheless, cases relating to child pornography are treated with the utmost severity in America. Steinbeck highlights the minimum punishment for people in possession of this type of content.

“Violation of US child pornography law is serious. Those who knowingly violate the law will face heavy fines and prison sentences. First offenses can result in 15 years or more in prison.The novel issue here is what punishment is appropriate for node operators that did not know they were in possession, never viewed the unlawful content, and did not knowingly distribute it.”

Considering all of the above, Steinbeck believes that government could potentially take steps to enforce the removal of any unlawful content on the Blockchain: “Ultimately, Blockchains need to be built to comply with US laws if they wish to operate in the US.”

Lack of legislation

There are both benefits and drawbacks to current data insertion methods on the Bitcoin Blockchain.

Along with transactions, users can send short messages and files by encoding this data as transactions through a variety of different data insertion methods - available to users and miners alike.

A possible benefit is the ability for “archiving of historical data or censorship-resistant publication, which helps protecting whistleblowers or critical journalists”. However, all users synchronising a full node have no choice in receiving and storing this data, which can lead to serious problems.

Users with a copy of the Bitcoin Blockchain could inadvertently be in hot water for a number of reasons. As we’ve seen with cases against torrent websites, peers with copies of pirated content could face prosecution for copyright infringements. Also users might be infected with malware that is stored on the Blockchain. You could also unknowingly be storing information that is classified.

However, as Todd highlighted, decoding data stored on the Bitcoin Blockchain is no easy task and the average user would never be able to access this data. Still, there is no guarantee that it will ultimately save them from being prosecuted. That’s why the German research demonstrates the necessity of multilateral legislation in the US and worldwide.