Worries Over Illegal Blockchain Data Overblown, Analysis Says

CYBERSPACE—Cryptocurrency users, a category which includes an increasing number of independent porn performers as well as their customers, were thrown into a panic last week by a new academic study reporting that the Bitcoin “blockchain” contained hidden child porn, which according to the report would turn anyone who downloaded the blockchain into a criminal. A blockchain is a digital ledger containing a record of all transactions made in a specific cryptocurrency. But just like a real-life ledger, users can add notes or messages—or anything they want—to the document, assuming they have the correct software to do so. According to the paper by researchers at RWTH Aachen University in Germany, an analysis of 1,600 such notes or messages in the Bitcoin blockchain found that “among these files there is clearly objectionable content such as links to child pornography, which is distributed to all Bitcoin participants.” That “objectionable content” included one image that may have been illegal porn involving underage children, and 274 other links to external files containing similar material. But an analysis published by the tech news site Wired.com argues that cryptocurrency users will not be held liable for illegal material on a downloaded blockchain because, “the fact that legal liability could apply doesn’t mean that it will, or even that users will fear that result.” In other words, because blockchain users are unable to control the content of the blockchain, they will not be held legally responsible for whatever illegal material may be embedded in there. But the Wired analysis did not take into account upcoming changes to Section 230 of the Communications Decency Act, a section which was designed to shield internet sites and platforms against legal liability for content posted by individual users. But once the recently passed FOSTA bill, supposedly designed to curtail “sex trafficking” online, is signed into law, that protection offered by Section 230 may largely disappear, or at least be scaled back. “Up until FOSTA passed, section 230 of the Communications Decency Act protected ISPs and other internet users from this kind of transmission, saying that they would not be ‘treated as the publisher or speaker of any information provided by another information content provider,’” wrote the cryptocurrency news site CoinDesk. “Currently, it is unclear whether section 230 will be completely nullified by FOSTA.” Under FOSTA, the “Fight Online Sex Trafficking Act,” users in possession if the blockchain could be liable not only for clearly illegal child pornography, but for any material that could be interpreted as promoting “sex trafficking.” How broadly the FOSTA provisions will be interpreted, and what type of material will count as promotion of sex trafficking, remains unclear. The bill passed the United States Senate on March 21 and has not yet reached the Oval Office to be signed into law. But the site Bitcoin.com, like Wired, described the concerns that blockchain users could be held liable for content inserted into a cryptocurrency blockchain as overblown. The site noted that any user who wanted to actually use the Bitcoin blockchain to find porn would have to sift through more than 250 million individual files. Of those, only 1.4 percent are believed to contain any additional data at all—and a much smaller percentage of that additional data is illegal or potentially illegal content.