Finance, Markets, Opinion

Bitcoin’s (BTC) Story May Have Come To An End

German researchers from the RWTH Aachen University, stepped on a weird and shocking discovery while exploring the digital currency’s blockchain archives. Apparently, Bitcoin’s (BTC) distributed ledger is being used, besides storing monetary information, to store hideous links and data connected to some hundreds of files with illegal pornographic content of underaged children.

Over 1600 files found in 1.4% of the blockchain, with a couple of them containing links to the sexually abusive imagery of young children, mostly stored on the dark web.

Other files included copyright violations as well as malware, the researchers say, while they suggested that this could be a reason to the end of Bitcoin’s (BTC) popularity since possession of child pornography is illegal in almost all jurisdictions.

“We thus believe that future blockchain designs must proactively cope with objectionable content,” the researchers from Aachen University and Goethe University Frankfurt wrote in their official statement, which was presented in February at an international conference on financial cryptography in Curacao.

Buying and selling bitcoin on cryptocurrency exchanges does not necessarily require a copy of the blockchain. Yet, the shocking discoveries have legal implications for many Bitcoin participants that are essential for the blockchain itself, including and especially miners who must download the full blockchain ledger onto their computers in order to manage and promote transactions.

To make things worse, the unpleasant data can’t be deleted due to the fact that blockchain ledgers have been constructed as permanent, irreversible ledgers, a key feature that mostly has been promoted as potentially useful for storing volatile financial contracts and legal documents.

Experts say that the files likely got there when people added the material as notes to transactions or inserted them as if they were transactions themselves.

People using the blockchain can add non-financial data to describe a transaction’s purpose, insert messages or record information for other financial services.

Anyone with access to Bitcoin’s code has the green-light to upload data to the blockchain, including miners, exchanges, and other individual users who participate in compiling and editing the code.

Garrick Hileman, a crypto-currency expert at Cambridge University, said the issue of illegal content had been “discussed and known about for awhile,” and if records of the files were stored on users’ storage devices, they may be in violation of the law, applicable in almost every civilized country with a parliament.

It’s very difficult to identify who added the objectionable files since users on the Bitcoin blockchain use monikers and aliases and can create new addresses for every transaction.

It is almost impossible to store a full version of such files in the blockchain since the storage capabilities of a block size do not surpass a few MB, although that is more than enough to store external links to malicious and illegal websites.

Bitcoin now is in a very difficult position, despite its tremendous growth in market capitalization – especially since last year.

As most countries consider ownership of such data, even under the form of links, illegal and highly offensive to the law, Bitcoin users might face serious problems in the near future.

Investors and traders might not be to blame, but the underlying technology of the cryptocurrency itself is depending on developers and users who own all the data stored in the blockchain. If these key individuals would be suspended from the program, the whole system on which the Bitcoin relies would immediately collapse.

Where would all the $141 billion US dollars, Bitcoin currently supports go?

Many suggest that users started already to cash-out, causing the recent drop in the market, while others rub their hands smiling as Bitcoin’s crash would mean that all its market cap is going to be shared among alternative cryptocurrencies like Ethereum (ETH) which holds the second place based on market capitalization according to cryptocurrency tracker coinmarketcap.com

What are your thoughts on the matter? Are you happy or sad about this? Let me know in the comments below and I’ll share my personal position back.

Reporting for The Independent Republic, Ross Peili

 

 

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