It’s best to avoid explaining the mathematics of Bitcoin's blockchain, but to understand the colossal implications here, you need to understand one concept. Blockchains are a type of “distributed ledger”: a record of all transactions since the beginning, and everyone using the blockchain needs to have access to—and reference—a copy of it. What if someone puts illegal material in the blockchain? Either everyone has a copy of it, or the blockchain’s security fails.
To be fair, not absolutely everyone who uses a blockchain holds a copy of the entire ledger. Many who buy cryptocurrencies like Bitcoin and Ethereum don’t bother using the ledger to verify their purchase. Many don't actually hold the currency outright, and instead trust an exchange to do the transactions and hold the coins. But people need to continually verify the blockchain’s history on the ledger for the system to be secure. If they stopped, then it would be trivial to forge coins. That’s how the system works.
Some years ago, people started noticing all sorts of things embedded in the Bitcoin blockchain. There are digital images, including one of Nelson Mandela. There’s the Bitcoin logo, and the original paper describing Bitcoin by its alleged founder, the pseudonymous Satoshi Nakamoto. There are advertisements, and several prayers. There's even illegal pornography and leaked classified documents. All of these were put in by anonymous Bitcoin users. But none of this, so far, appears to seriously threaten those in power in governments and corporations. Once someone adds something to the Bitcoin ledger, it becomes sacrosanct. Removing something requires a fork of the blockchain, in which Bitcoin fragments into multiple parallel cryptocurrencies (and associated blockchains). Forks happen, rarely, but never yet because of legal coercion. And repeated forking would destroy Bitcoin’s stature as a stable(ish) currency.The botnet’s designers are using this idea to create an unblockable means of coordination, but the implications are much greater. Imagine someone using this idea to evade government censorship. Most Bitcoin mining happens in China. What if someone added a bunch of Chinese-censored Falun Gong texts to the blockchain?
What if someone added a type of political speech that Singapore routinely censors? Or cartoons that Disney holds the copyright to?In Bitcoin’s and most other public blockchains there are no central, trusted authorities. Anyone in the world can perform transactions or become a miner. Everyone is equal to the extent that they have the hardware and electricity to perform cryptographic computations.
Instead, Microsoft is tackling the challenges of making a truly decentralized solution for a large number of users. His group at Cornell is working on some problems, such as issuing credentials in a way that preserves privacy, and how people will take care of their security keys—the “Achilles heel” of any decentralized system, he says.
This openness is also a vulnerability, one that opens the door to asymmetric threats and small-time malicious actors. Anyone can put information in the one and only Bitcoin blockchain. Again, that’s how the system works.
Over the last three decades, the world has witnessed the power of open networks: blockchains, social media, the very web itself. What makes them so powerful is that their value is related not just to the number of users, but the number of potential links between users. This is Metcalfe's law—value in a network is quadratic, not linear, in the number of users—and every open network since has followed its prophecy.As Bitcoin has grown, its monetary value has skyrocketed, even if its uses remain unclear . With no barrier to entry, the blockchain space has been a Wild West of innovation and lawlessness. But today, many prominent advocates suggest Bitcoin should become a global, universal currency. In this context, asymmetric threats like embedded illegal data become a major challenge.
The philosophy behind Bitcoin traces to the earliest days of the open internet. Articulated in John Perry Barlow's 1996 Declaration of the Independence of Cyberspace, it was and is the ethos of tech startups: Code is more trustworthy than institutions. Information is meant to be free, and nobody has the right—and should not have the ability—to control it.