Money 2.0 Stuff: Child pornography via OP_RETURNs – The Block Crypto

Quick Take

  • What are the limits of blockchain immutability? Bitcoin Satoshi’s Vision, a 2018 fork of Bitcoin Cash (itself a 2017 fork of Bitcoin), is in the process of testing the limits of social consensus around what information can go on public blockchains.

Child Pornography via OP_RETURNs

A major change in the Craig Wright / Faketoshi-led project is in the use of OP_RETURN, an old transaction type that allows users to store data on the Bitcoin blockchain. In a previous discussion of OP_RETURN, The Block’s Steven Zheng discussed some of these uses:

Bitcoin enables users and businesses to embed 80 bytes of arbitrary data into its blockchain through OP_RETURN transactions … The activation of OP_RETURN led to creative uses on Bitcoin. Businesses and users can now insert a variety of information, from simple messages to notarized documents, onto Bitcoin’s blockchain.

80 bytes is, err, not a lot of data. To date, while some parties have potentially “abused” the use of OP_RETURN, the small scope of use cases has warded any potential abuse on the Bitcoin blockchain. Meanwhile, businesses working with Bitcoin Satoshi’s Vision, like Money Button, have supported 100kb OP_RETURNs, noting that:

The new large OP_RETURN data sizes on Bitcoin SV are the start of a new era of leveraging Bitcoin as a data carrier. Long-term, miners will be funded entirely by tiny transaction fees on huge volumes of transactions. Thanks to this improvement, it is now possible to build many of the types of applications that will fund miners in the future.

Supporters of Bitcoin SV make the case that the focus on miner subsidies via OP_RETURN fees is a case of the Jevons paradox: expanded block sizing and increased efficiency of the base layer chain could induce further usage. Increased of the blockchain for data storage has sparked major controversy as it has allowed child pornography to be posted to the chain.

Businesses like Money Button have come out against this illegal activity, despite noting that “[i]t is not possible to censor the blockchain.” On the other hand, nChain founder and Bitcoin SV advocate Craig “Faketoshi” Wright has previously noted that he’s staunchly against allowing child pornography, noting that “[Bitcoin ABC] plan to allow Kiddie Porn. They argue permissionless and outlaw status.” Disturbingly enough, his worst nightmare has manifested as he realizes child pornography can be broadcast on the BSV chain (arguably made even easier with SV’s expanded OP_RETURN size).

With a Kobre & Kim attorney specifying that “federal receipt and distribution of child pornography are general intent crimes, so the government does not have to prove that the defendant had ‘bad or evil’ intent to obtain a conviction”, the flippant rejection of Not-a-Lawyer Craig Wright is a bit shocking.

This is a non-unique problem—Bitcoin’s own blockchain contains dozens of links to child pornography but does pose important questions:

  1. If Bitcoin SV’s massive OP_RETURNs allow for continued publication of elicit content, what are the implications for those knowingly running full nodes on their machine? How does anyone make a distinction in intent?
  2. Even if the Bitcoin SV community shares Wright’s ethos of categorical rejection of a certain class of heinous content, how is this enforceable? Who decides what content is “appropriate” for publication? How does this ruin the supposed immutability properties of the chain?

@TCRVIPParty let’s party

If you were on Crypto Twitter this week, you may have seen many annoying tweets from the CT cognoscenti along the lines of “@TCRVIPParty let’s party.” These tweets were for public registration for TCR Party, a new game launched by the Alpine team.

TCR Party is simple at it’s core: it’s a token curated registry, a really fancy way to say “public list which is curated by a bunch of people with a token used as coordination.” In this case, the curated list represents the “best” CT influencers and is curated by the community to cull out those with weak takes. People can earn tokens by nominating members, challenging the inclusion of existing members on the list, and voting on challenges when they’re made.

While the game itself is fun, more interesting still is the UX. Virtually all of the interaction with the TCR itself happens on Twitter, both publicly and in the DMs. While the functionality of the app feels trivial, as a fun experiment, the usability of the app has far exceeded those shipped by the strongest venture-backed teams.

Given the lack of real financial value of the tokens, the game remains a playful, fun experiment that doesn’t stress the limits of TCRs.

So far, members have had a lot of fun nominating and booting members from the list which can be tracked on the TCRVIPParty’s leaderboard.

TON is 90.0000% Done

Developer estimates are really hard, man. Talk to any software engineer and every potential project takes either a weekend or is virtually impossible. Developers are notoriously bad at delivering features reliably and on time.

This is the main reason I find Telegram’s continual developer updates absolutely hysterical. The Block’s Steven Zheng parses the most recent update:

According to the investor update, a summary of which The Block has included below, the overall build of the TON network is now 90% complete, an increase from 70% in September 2018 … The investor update also shows that Telegram has delayed its testnet launch to March 2019. The original launch date was expected to be January 2019.

It’s important to remember that massive software engineering efforts like the coordination launch of a public blockchain is not exactly easy to estimate, especially when the project is venturing into a land of unknown unknowns, making grandiose claims with a white paper that read closer to a wishlist of features ranging from a sharding implementation to techno-babble like “hypercube routing.”

If Telegram really does launch a test-net this year, it should be interesting to see what, well, they’re actually doing. As of yet, in spite of raising billions of dollars on the back of grandiose claims, few people really know what they’re doing. While the update includes indications that they’re working on new partnerships.

Other Stuff Happened

  • Matteo Leibowitz presents some compelling ideas around how novel auction dynamics could fix problems with fee markets.
  • Binance launches a decentralized exchange with their lightning-fast product and engineering team shipping once again. This new exchange utilizes $BNB (Binance Coin) as the native currency presenting a use case in addition to its proto-security token functionality.
  • Ethereum developer Preston Van Loon presents his vision for Ethereum 2.0, expressing optimism though noting some concern over availability of funding for R&D initiatives.

Another crazy week in cryptocurrencies following Tom Brady’s 6th ring. Who is the Tom Brady of cryptocurrency? Sound off @TheBlock__.

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