Something Deeply Disturbing And Illegal Has Been Found Hidden Within Bitcoin's Transaction Log

The transparency of Bitcoin transactions is central to maintaining security within an anonymous currency platform, yet the ability to store unremovable content in these records could threaten the legality of the entire system. igorstevanovic/Shutterstock

Aliyah Kovner 23 Mar 2018, 21:05

Following a meteoric rise in value over the winter of 2017, Bitcoin’s price began to drop early this year, leading many economists and investors to speculate that the cryptocurrency bubble is about to burst spectacularly.

Yet a recently published analysis by German researchers highlights how one of the digital currency’s greatest strengths could lead to its downfall, regardless of monetary value.

According to their report, governments across the world could be forced to outlaw Bitcoin due to users’ ability to store illegal – and disturbing – content within its open-access transaction ledger, called the blockchain.

Cleverly designed to provide a record of payments that is both transparent and tamper-proof, the blockchain also includes a feature that allows users to insert non-financial information into entries.

This arbitrary data storage has many benefits: It creates a space for relevant transaction notes, improves the functionality of the secure transaction validation process, and even provides a means for safe and anonymous archiving of sensitive data – thus protecting whistleblowers and threatened journalists.

The problem? To buy, sell, or trade bitcoin, every user must download a copy of the blockchain in its entirety, meaning that they are technically in possession of all the undeletable content contained within. And perhaps unsurprisingly, given human nature, many misuse the blockchain to store objectionable content.

“As a result, it could become illegal (or even already is today) to possess the blockchain, which is required to participate in Bitcoin.”

After combing through about 3.5 million instances of arbitrary data on the digital ledger, the researchers were able to extract 1,600 files. Though the majority was harmless, dozens of folders contained links to copyright or privacy-infringing content, and two were link lists to child pornography websites.

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