The ATO has offered more definitive rules on the use of the ‘personal use asset’ exemption for Capital Gains Tax purposes.
Mainstream media are at it again! They have some fantastic fodder this time to hype up the claim that everyone who has anything to do with Bitcoin automatically has child pornography on their computer, hence we will all be arrested and thrown in jail and bitcoin will be dead, again. We know this is not true, so, what are they actually talking about? I, personally am not a developer and so it never occurred to me that you could put more than just a transaction onto the blockchain but it turns out you can! After a bit of digging, contacting developers and reading mind-bending developer blogs on this subject I believe I can help break it down for us so we are more educated and more prepared when mainstream media throw more of this our way!
What does the article suggest?
A German research team have released a paper that revealed child abuse material on the blockchain. This could render it illegal to have the blockchain or mine bitcoin as having it on your computer pertains to having child abuse material in your possession.
Can you get images, files, and links onto the blockchain?
Short Answer: Yes. It can be quite expensive and it doesn’t happen as often as you think.
Long Answer: You can. I had no idea either don’t worry. It isn’t particularly easy but it is becoming easier. I spoke to an incredibly helpful blockchain developer from Brisbane this morning, Lucas Cullen, and he told me that this was raised in 2015 and he wrote a blog post about it. In the blog post he says:
“While this *could* be done, it is simply not practical. The only way to store arbitrary data in a bitcoin transaction, is to use the OP_RETURN field. This is currently limited to 80bytes. Let’s say you want to store a 600 x 338 image, very small by today’s standards, less than 1mp. Even with compression, the file size is 66 kilobytes or 66,000 bytes!
66,000 / 80 = 875 transactions required to send an image. Also as bitcoin transactions are unordered, that payload would need to include some identifier to re-order the “image”.
At around 1 cent per transaction, it would cost $8 to send. You would be better off sending via SMS or Twitter, at least the later is free and can hold 160bytes!”
There are now Content Insertion Services that have popped up to actually help people easily put arbitrary metadata into the blockchain. Some of these services include CryptoGraffiti, Satoshi Uploader, and Apertus, just to name a few. I went onto CryptoGraffiti to have a look. The site says
“Bitcoin’s block chain is a decentralized database which main purpose is to secure and hold all Bitcoin transactions. It can be used to store other data too. CryptoGraffiti.info allows anyone to easily decode and read arbitrary messages saved into the block chain. No single entity has the power to alter or truncate these messages.
Millions of people using Bitcoin clients are storing the very same data on their computers. It is advisable to use this web service responsibly and with caution because all data saved into the block chain will remain there forever. CryptoGraffiti.info offers a functionality to encode custom messages as bitcoin addresses and import them to the wallet for storing text into block chain.”
Their homepage is a thread of what data people have put into the blockchain. It’s almost like accidentally going into a 4Chan thread that turns south pretty quickly, well, not that bad as yet, but super weird. A couple of messages that were either from time travelers or aliens, someone saying hello to a forensics team, a couple of valentines day posts, ads with links for other coins, a couple of memes, a couple of messages warning about mass media manipulation (duh) and a warning about Trezor having a back door. I personally didn’t want to scroll too far down into the abyss as I don’t want to see objectionable content but what I briefly scrolled through was quite harmless and not even a quarter as many posts as I expected. Why were there not many posts you ask? Because it costs money. Just like doing a normal transaction on the blockchain, you have to pay whatever the fee is at the time to have your data verified and recorded. This no doubt stops people from jumping on there and going crazy with stupid messages and images which can clog up the blockchain.
Are there images relating to child abuse on the blockchain?
Short Answer: Yes. A total of 2 transactions contain Child Abuse material. There are currently over 180,000 transactions per day.
Long Answer: Unfortunately, yes. Can I say with 100% certainty? No. I like verifying everything I put into this blog but this is one I cant chase down, I know I could find it if I wanted to verify it 100% for you, but I don’t want to see it and I don’t want to search it to that degree. So, how can I say ‘yes’ to this question? The paper that the ABC reference but do not link to, I managed to track down. It is titled “A Quantitative Analysis of the Impact of Arbitrary Blockchain Content on Bitcoin”. I will link to it here and in the references. They state
“Although most data originates from benign extensions to Bitcoin’s protocol, our analysis reveals more than 1600 files on the blockchain, over 99 % of which are texts or images. Among these files there is clearly objectionable content such as links to child pornography, which is distributed to all Bitcoin participants.”
Who paid for this study and why I don’t know. But if you have met the human race lately, you know there are some pretty terrible, devious and monstrous people out there that do these things. So, the likelihood of people putting child abuse pictures on there is pretty high. Sigh. I know. The silver lining on this was that there was not nearly as much objectional content on the blockchain as you would imagine.
“Bitcoin’s blockchain contains at least eight files with sexual content. While five files only show, describe, or link to mildly pornographic content, we consider the remaining three instances objectionable for almost all jurisdictions: Two of them are backups of link lists to child pornography, containing 274 links to websites, 142 of which refer to Tor hidden services. The remaining instance is an image depicting mild nudity of a young woman.”
To be clear two ‘transactions’ contain backup links of 274 links of child abuse content. There are currently over 180,000 transactions per day on the blockchain. I am not deeming these two transactions irrelevant, not at all. But shouldn’t the headlines be reading “Police Investigation Launched Into List Containing 274 Links to Child Abuse Material”? THAT, to me, is headline news. Why are these two transactions on a blockchain that has over 180,000 transactions per day even being reported to try and put the blockchain in a bad light? Isn’t just ONE link to child abuse material enough to launch an investigation into the origin of the child abuse content? I sure think it is.
Is Bitcoin’s blockchain the only online platform that has been tarnished by child abuse material?
Short Answer: No. Are you kidding? Do you have the internet on your computer? Its all at your fingertips.
Long Answer: No. Obv. There was a revealing article on Business Insider headlined “Content moderators for tech giants like Facebook and YouTube reveal what it’s like to sift through some of the most disturbing material on the internet”. It reported the tremendous psychological toll it took on the moderators and the staff turnover was reflective of the damage it did. Chatrooms are also used to pass on child abuse material. Alexander Anh Nguyen Tran was arrested in an Adelaide airport in possession of a hard drive with over 2000 illicit images on it, hence planes are used to move illicit material from one country to another. Pornography addicts are arrested regularly who search child abuse material on Google. You get the drift.
Does this mean miners can see the child abuse content?
Short Answer: Yes. Everyone can see the content it doesn’t mean they will see it, but it will remain there on the blockchain forever.
Long Answer: Yes. Miners don’t tend to sit there watching every transaction and considering the child abuse material was contained in links it is highly unlikely they will click them. Miners are not there to muck around, they are there to make money and they certainly do not want to go clicking links that could contain malware and jeopardise their entire, expensive operation. I certainly hope members of the general public don’t go trawling the blockchain for random links to click either.
Will the blockchain be made illegal to have on your computer?
Short Answer: Unlikely.
Long Answer: Unlikely. Why? You have the YouTube app on your phone, no doubt there currently resides child abuse material on there that moderators are feverishly trying to remove and will you see it? Not necessarily. The blockchain has such a large and strong community now that such a benign accusation would not stick.
Is there any good to come from this?
Short Answer: Yes.
Long Answer: Yes, of course. There are a few silver linings here:
It has brought to light that you can put images, links, and text on the blockchain. Many, including myself, were ignorant of this.
Hopefully, these 274 links are handed over to the proper authorities and the links are swiftly broken.
It shows what ridiculous lengths mainstream media will go through to produce FUD.
It gives developers in the future the chance to innovate and safeguard against such instances.
By Casey Pyne
For anyone whom could not fly to Tokyo, Japan to go to Satoshi’s Vision Conference this year do not fret, you can watch the talks live over on YouTube. Some talks will be re-uploaded.
If you cannot watch the live stream or prefer to read about it Brendan Lee is currently there now and will post updates on Blockchain Australia.
For more information on Satoshi´s Vision Conference go to their official website.
Get a cut and drink a beer in a 50’s style shop
Meet Ms R. Badass💇 cut specialist and get your crypto haircut 😝. Check out Crown and Co when visiting Fortitude Valley, Brisbane.
Book a specific time or just walk-in. 🌹💐And best of all is you can pick your barber!! 🌹💐
Acceptance of cryptocurrencies around Australia is picking up momentum as Travel By Bit merchants start popping up in Launceston, Tasmania.
To celebrate we are offering a $30 Gift Voucher for the best suggestion of a ‘crypto’ ized menu name.
Post your suggestions in the comments.
I am also in discussions with several other food outlets along with a large organisation employing hundreds of people to both start accepting crypto for invoices and POS payments along with offering all staff crypto wages.
Got me some Jerk chicken paid by #Litecoin at #JAMROCJamaicaJerk Chicken🍗🍗🍺🍺. Come cool your foot in this chill cafe. Da Jamaican sprint team have landed at #GC2018 & Jamroc’s gonna give em a feed. Make it a crypto #commonwealth games 😁
This week has seen the launch of an innovative new product developed here in Australia called SAFEWORDS by Coinstorage Guru (www.coinstorage.guru). The product is a distributed mnemonic seed storage kit including everything that you need to make a 2 of 3 backup of the mnemonic seed for your cryptocurrency wallet.
SAFEWORDS breaks your mnemonic seeds into three partial solutions which are then committed to three separate cards. No card on its own has enough information to compromise your wallet, and any two of the three cards together can recover your seed. The cards are stored in envelopes with branded, serial numbered tamper evident seals adding a further layer of security to your storage solution.
The SAFEWORDS kit includes the seed cards, storage envelopes and a set of tamper evident seals with a matched unique serial number. The kit is supplied in a protective sleeve inside a mailing envelope. SAFEWORDS is fully customisable and can be branded to suit any requirements.
SAFEWORDS is a simple, safe and cost effective way for any cryptocurrency user to backup any wallet which has a mnemonic seed and to then store that backup in a zero trust environment.
SAFEWORDS is only available through www.coinstorage.guru and Blockchain Australia members will receive a 10% discount. Click here to see the coupon code. Product shipments are live now and orders within Australia will usually take 2-4 business days to ship.
The ATO has engaged Blockchain Australia to help in the battle against scammers utilising bitcoin to con people out of their hard earned satoshi’s.
The latest battleground on this ongoing war is with the scammers accepting bitcoin in payment for the alleged ATO tax debt.
“While the ATO is concerned about scammers moving to adopt cryptocurrencies, taxpayers should remain vigilant for other versions of the fake tax debt scam. Scams demanding direct deposits into third-party bank accounts, demanding payment via iTunes cards or with a pre-paid Visa gift cards remain the most frequently reported to the ATO.” ATO Media Release.
As always, users should be careful when dealing with anyone on the phone or online and verify any claims made against them with the government directly.
The full media release can be found at; https://www.ato.gov.au/Media-centre/Media-releases/Beware-bitcoin-tax-scammers/
Blockchain Australia is proud to be working with ACS to organise a meetup at the innovation centre, Enterprize, in the Hobart CBD on Wednesday 21st of March.
Riley’s organisation has joined forces with BA Corporate Member Civic Ledger for the purposes of building an Ecosystem Exchange platform. The MVP will be heavily biased towards Carbon Credits, with allocate 1.2 million allocated after the initial ICO. It will also bring on a reef ecosystem credit, and a turtle biodiversity credit backed by CSIRO research on protection methodologies.
We hope our Tasmanian members can join us live at the event or via our You Tube Channel where we will livestream the event.
Facebook Event Details – https://www.facebook.com/events/1796246423769702/