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Illegal content stored on blockchain - legislations and procedures

POA Core Legal
#1

Illegal content embedded in transactions and legislations about this. Is there a possibility for Validator’s to be liable for “storing” this content on POA Network (storing on our nodes)

“Possession of child pornography is a crime, though it is still unclear how child pornography laws apply to node operators who are not viewing or curating the data being stored. These laws were drafted to be technology agnostic, meaning there is no exception for Blockchain nodes, so its likely that node operators will be treated like other data storage providers, for example, Facebook, Amazon Web Services, Google, etc.”

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#2

Transactions on POA Network are really cheap. During transactions, it is possible to insert data which would be stored on the blockchain. This could be text, links, or other content converted to hex format.

#3

Illegal content or links to Illegal content can be embedded in transactions. Do validators actually possess the content itself while storing the blockchain?

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#4

Interesting discussion - would validators even have purview to know that these illegal content is being transferred / distributed if they are masked as any other transactions? What happens once validators are made aware? The blockchain information itself cannot be altered - what are the implications of this?

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#5

These are great questions. What we could do is embed some text in one of transactions and actively try to find out if it is even possible to find this information on POA node. In hex format or any other way.

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#6

By the way, I am not suggesting to inspect a transaction during validation, which we as validators don’t have a way or right to do, but simply look at transaction on the blockchain and try to educate ourselves on this topic. Is this a real issue or not.

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#7

In no way is this legal advice but upon my own research it appears that general awareness of this objectionable data is not enough for legal prosecution of validators.

Prosecutors would recognize the lack of intent. Since blockchain users are not able to delete this data due to the immutability of blockchains, the intent appears to matter.

Section 512 of the Digital Millennium Copyright Act provides protection for intermediaries who are just doing their jobs. Section 230 of the Communications Act also provides protection for other kinds of content, which is why Twitter and Facebook weren’t shut down when one of their millions of users posts defamatory statements, child pornography. It appears from a legal stance, those who blockchain nodes are performing similar functions to internet service providers or web hosts.

Other examples include peer to peer file sharing cases in the 2000’s, companies like Kazaa and Grokster were shut down since their services were primarily used for copyright infringement. In contrast, the majority of content on the blockchain is for financial transactions. Even if pornography is recorded on the blockchain, it would be hard to argue that its the intended use. Same goes for counterfeit items, like when Tiffany sued Ebay for listing counterfeit items, Ebay had general knowledge of the trademark infringement but wasn’t held responsible.

Same would go for POA, Bitcoin and other blockchains in my opinion. These are all valid concerns and interesting topics to discuss regarding innovative technologies and how they apply to law.

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#8

Excellent post. History repeats itself… as Theresa points out, this same argument floated around in the mind 1990’s as to whether or not Internet Service Providers (ISP’s) are responsible for the contents of emails that pass through their servers. The obvious answer is no, of course not, since the ISP never inspects nor has the intent to inspect the content of the email, just handles the processing and delivery based on the headers. This is the “Common Carrier” status that is enjoyed by letter and package delivery companies, and communications providers around the world.

Blockchain transaction data is publicly available, sort of like email headers… the content can not be only referenced as hashes, links, etc. You can send an encrypted email and the headers are still available even though the content is not. This is the original email liability argument, the same should apply as Validators / miners are determined to be common carriers.

The ISP (or in this case Validator or mining node operator) acts as a common carrier. Again as Theresa points out in her post above, Section 512 of the Digital Millennium Copyright Act provides protection for intermediaries who are just doing their jobs. Hopefully as more people understand the nature of blockchain and how it operates, this will become common knowledge.

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#9

Thank you, Jim. Glad to be part of this discussion and thank you for contributing as well.

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#10

Let’s also remember, that if validators are doing what they are supposed to be doing, they are checking (and validating) id’s. If something like child pornography get’s put into the blockchain, it would be traceable back to the person who provided their id to upload the transaction. (Again, back to the need for clear and precise policies), there should be an explicit should be a POLICY assigning responsibility for the content onto the person who provided it for upload.

But what if such illegal material does find its way onto the blockchain? I know that smart contracts can have a “kill switch” written into the contract. I am not a blockchain developer so I am not sure, but can the same be done for non-smart contract, static code uploads? Or, could the blockchain core code block (as in deny access or prohibit) specific code from being accessed?

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#11

Same question from different perspective.
Are validators (or anybody else) obligated to take actions if for example someone store personal sensitive data on blockchain. I’m from Poland - one of EU countries which have qute strict regulation about personal data. According to this regulations for exampe in case of some sensitive data put on website by ones of its user owner of a website is also accountable and even ISP to some extent.
Also from technical perspective it is not 1000 percent true that blockchain is not immutable If there is 51% consensus history can be rewriten (for example to exclude malicious transaction).