There have been several press reports this week claiming that illegal images are stored on the Bitcoin blockchain, thus potentially creating a liability for anyone who has a copy of the blockchain. The articles cite a recently published academic paper, but the fact that arbitrary data can be included in the blockchain is not new. It is a phenomenon that a simple a Google search would have revealed has been well understood since at least 2013 if not earlier, and the facts of the matter are not as damning as recent headlines suggest. We are disappointed that so many are jumping to conclusions about what it means for Bitcoin that some despicable people have exploited it and linked it to the scourge of child pornography.

This is what’s happening. Any set of data can be encoded as text using an algorithm, such as the ubiquitous Base64. Encoding allows data to be easily handled by any number of everyday applications, like email. This means that I can take the line from Hamlet,

To be, or not to be, that is the question

run it through a Base64 encoder, and get the following series of ASCII text characters:

VG8gYmUsIG9yIG5vdCB0byBiZSwgdGhhdCBpcyB0aGUgcXVlc3Rpb24=

You can take that string of characters and run it through a Base64 decoder and you will get the original sentence. You could do the same kind of encoding with other data, like an image, but you will end up with much, much longer strings of text. It’s an incredibly basic form of encryption.

Bitcoin transactions allow one to add to them a short text memo. What some have done is to include encoded text in transaction memo fields and these are recorded in the Blockchain. Some of these encoded surprises on the blockchain include wedding vows, Bible verses, the Bitcoin logo and white paper, and quotes from Nelson Mandela. Unfortunately, some sick individuals have also added encoded images of child abuse. What’s important to know is that a copy of the blockchain does not literally have within it Bible verses and images, but instead has random gibberish text strings that, if one knows where they are, one could put in the effort to decode them to their original form. There is a difference.

It is beyond unfortunate that this feature of Bitcoin has been exploited by malicious persons, but we have to keep in mind that any platform that publishes user-submitted data is susceptible to having encoded messages slipped in. For example, using steganographic techniques, one could take out an ad in the New York Times that includes a message that is imperceptible to the naked eye, but that can be decoded if one knows it’s there. If the secret message were “illegal content,” it would make no sense to hold the Times accountable for publishing a message of which it was unaware, it would not make sense to hold accountable Times subscribers for possessing a copy of the paper, and it certainly wouldn’t make any sense to try to find and destroy every copy.

While evil people will always exploit technology to do evil things, we shouldn’t succumb to a moral panic and fall in the trap of blaming the technology for that evil. This technique of including arbitrary data in the Bitcoin blockchain that is sporadically being used perversely is the same technique that is being used systematically every day to do socially beneficial record notarizing, like tracking land title on the blockchain. We should be careful not to disparage technology because of fear, uncertainty, and doubt.