Child abuse imagery found within Bitcoin's blockchain
theguardian.com
theguardian.com
In other words, Bitcoin operation can continue with pretty much a non-controversial software change that allows miners to choose to ignore particular outputs.
If a miner genuinely doesn't know where in the chain these files are, then I'm not sure it can be claimed that the miner is in "possession" of it and the legal principle of mens rea will mean that the miner won't be criminally culpable in most jurisdictions.
Over several transactions and you need to put it together, or will there be enough space to store an image in a OP_RETURN script?
83 bytes doesn't sound like it's enough to store any abuse image.
http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photo...
“Only miners need the whole blockchain, and the blockchain contains illegal data, therefore mining is equivalent to possession and distribution of child porn...”
... or, the bitcoin developers will just have to add a way of removing that data when a new block is mined, which I guess is what will eventually happen. What a mess.
As long as there is any option of storing anything user-derived in the blockchain, this problem will exist. And it is conceivable that the transaction amount can be used to encode binary data... and this doesn't just impact Bitcoin, but also normal banks. Assuming a bank with two accounts and no transfer fees, I could transfer money between the accounts and encode my data e.g. in the "cent" division, with every transaction encoding a single byte. So technically the bank is in possession of child porn (or, to choose something of lesser importance, the tiny libdvdcss code), but is simultaneously not allowed to erase it due to financial transparency laws...
As far as I know (and that ain't much -- I'm not an expert), bitcoin's fundamental contribution was solving "The Byzantine Generals' Problem"[0] in a novel way by using its proof-of-work algorithm combined with the blockchain. This is how/why it works and has been adopted the world over.
Personally, I would say that the whole point of it was not to store censorship-resistant information, but to provide a store of value independent of the current system of state-controlled and/or -regulated fiat currency. The fact that it is also useful for storing censorship-resistant information is a side-effect of the developer adding that feature to the code.
Well, that's a fiasco...