Are we all criminals? Bitcoin Blockchain contains illegal data.

[AGD]

https://fc18.ifca.ai/preproceedings/6.pdf

Abstract.
Blockchains primarily enable credible accounting of digital
events, e.g., money transfers in cryptocurrencies. However, beyond this
original purpose, blockchains also irrevocably record
arbitrary data, ranging from short messages to pictures. This does not come without risk for
users as each participant has to locally replicate the complete blockchain,
particularly including potentially harmful content. We provide the first
systematic  analysis  of  the  benefits  and  threats  of  arbitrary  blockchain
content. Our analysis shows that certain content, e.g., illegal pornogra-
phy,  can  render  the  mere  possession  of  a  blockchain  illegal.  Based  on
these insights, we conduct a thorough quantitative and qualitative anal-
ysis of unintended content on Bitcoin’s blockchain. Although most data
originates from benign extensions to Bitcoin’s protocol, our analysis re-
veals more than 1600 files on the blockchain, over 99 % of which are texts
or images. Among these files there is clearly objectionable content such
as links to child pornography, which is distributed to all Bitcoin partic-
ipants. With our analysis, we thus highlight the importance for future
blockchain designs to address the possibility of unintended data insertion
and protect blockchain users accordingly.

6    Conclusion
The possibility to store non-financial data on cryptocurrency blockchains is both
beneficial and threating for its users. Although controlled channels to insert non-
financial data at small rates opens up a field of new applications such as digital
notary services, rights management, or non-equivocation systems, objectionable
or even illegal content has the potential to jeopardize a whole cryptocurrency.
Although  court  rulings  do  not  yet  exist,  legislative  texts  from  countries  such
as  Germany,  the  UK,  or  the  USA  suggest  that  illegal  content  such  as  child
pornography can make the blockchain illegal to possess for all users.
As we have shown in this paper, a plethora of fundamentally different meth-
ods to store non-financial–potentially objectionable–content on the blockchain
exists in Bitcoin. As of now, this can affect at least 112 countries in which pos-
sessing content such as child pornography is illegal. This especially endangers
the multi-billion dollar markets powering cryptocurrencies such as Bitcoin.
To assess this problem’s severity, we comprehensively analyzed thequantity
and quality of non-financial blockchain data in Bitcoin today. Our quantitative
analysis  shows  that  4 %  of  the  roughly  251  million  transactions  in  Bitcoin’s
blockchain carry arbitrary data. We could retrieve over 1600 files, with new con-
tent infrequently being added. Despite a majority of arguably harmless content,
we also identify different categories of objectionable content. The harmful poten-
tial of single instances of objectionable blockchain content is already showcased
by findings such as links to illegal pornography or serious privacy violations.

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[Xynerise]

Most banknotes of different countries have traces of cocaine in them which is illegal everywhere in the world, but the notes still count as legal tender and no one is arbitrarily arrested for possession of such notes.
IANAL but perhaps this can be extended to the blockchain?
(Or maybe not as physical and digital media and rules vary widely)

No one gets into trouble for running a Tor relay but that is quite different; their computers are relating encrypted traffic, not storing it locally on their machine forever.

In any case, OP_RETURN outputs are probably unspendable so they can be  pruned anyways and can serve as plausible deniability.
Although I don't see how Coinbase text in blocks can be pruned separately.

[Cryptagio]

well, it is not the best idea to use blockchain as a database because of its block limits. So uploading pornography will be too time consuming and costly.

also spamming using bitcoin is quite costly as well due to high tx fees

[buwaytress]

Ah, reminds me of such treasure troves as like when they discovered the embedded data of the dark sides of our wonderful species: http://www.btcpedia.com/ped0-links-in-bitcoin-blockchain/

I'm still pretty sure that most criminal courts in the world would still have to prove intent in charging people as criminals, otherwise, as Xynerise says, I'd be guilty of cocaine trading.

Maldives once banned potatoes and a whole range of other vegetables by virtue of them containing traces of nicotine. I'd really like to find out the experience of standing trial for using Bitcoin!

[AGD]

There is a little error in the study:

This does not come without risk for
users as each participant has to locally replicate the complete blockchain,
particularly including potentially harmful content.

Users don't need to replicate the complete blockchain. This only applies to full nodes.

[DannyHamilton]

There is a little error in the study:

This does not come without risk for
users as each participant has to locally replicate the complete blockchain,
particularly including potentially harmful content.

Users don't need to replicate the complete blockchain. This only applies to full nodes.

Correct.  Furthermore, nodes do not need to store the data nor do they need to provide that data to others.

It is possible to run a node that receives a block, processes the block, and then discards the data.  Additionally, all unspendable transaction outputs can be discarded, so that the UTXO contains only the spendable outputs.

Bootstrapping a new node will require that some node, somewhere, stores and provides access to the full blockchain (preferably a significant number of such nodes), but it does not require that ALL nodes store or provide access to that history.

[AGD]

Though I am pretty sure, that no one uses the blockchain to find CP or other illegal content, what about the simple fact, that people could - in theory - access illegal data, which creates a legal attack vector for states to criminalize Bitcoin users. First subpoenas could be send to providers of SPV wallets, whose servers might have to be shut down.

Edit: Flooding the Blockchain with illegal content can be done to force decisions in favor of a criminalization.

[bitorama]

bitcoin is just a tool, so we are not criminals if we don't use it for illegal things

[nc50lc]

There's a similar topic in the AltCoin Section that might have the answer to this: Is this FUD or a genuine cause for concern?
That can be a FUD or an indirect attack to destroy Bitcoin.

no there is no picture, there is only hashes on the blockchain. in facts it is only 80 bytes max data which you then have to decipher and then follow it until you get to a picture.

One reasonable thing is that some parts of those hashes when translated into human readable format results into "chunks" of data when arranged and put together became that "completed jigsaw puzzle" images and texts.

The whole blockchain is too huge that if you want to make something out of the hashes from the blocks is possible, it's even possible to find phrases/sentences out of it.
Like what they (FUD~ers) have been doing to books, highlighting words and making a mysterious "hidden" message to boost or destroy its fame.
Someone must have made up that news by finding those "hidden" evidence to spread that FUD.

It's a Retro FUD.

... I said.

[crocozino]

this is crazy accusation by some crazy  western governments and agencies!
cause if we will follow this logic, then all men are dangerous rapists and criminals!
why?! because all men have penises, with a penis a man can rape a woman and became a rapist and criminal, and by that logic it is clear that because all men have penises  they are criminals.
right?!?
NO! they have to stop that crazy logic and generalizations!