Well it depends. If blockchain stored on disk directly contains knows know illegal content it will be picked up by some scanners used by law enforcement. Just like pirated software it won't be enough on it's own but might be a good leverage in the original case that caused computer hardware seizure.

In piracy, you had the _intent_ of doing something, and that's illegal, regardless of whether or not you had the knowledge it was illegal.

In this case, you have an idea that child porn is illegal, but you had no idea it was coming through your blockchain.

Those are very different cases.

There is a possibility of a technical solution:

- You create a special rule for a block known to contain illegal data.

- The illegal data in the block gets NULLed. The other transactions are left untouched.

- The checksum for the next block is no longer calculated, instead it is hardcoded. This means there is no way of verifying the transactions in that block. Perhaps you add a new signature for the block with the NULLed data to make it harder to tamper with.

Once you start doing this workaround once you will probably have to do it repeatedly.

1. That kind of defeats the point of the blockchain.

2. The problem is a technical one as a result of a blockchain allowing content other than financial transactions to be a part of the record.

Wouldn't that allow a 'denial-of-service' like attack? You keep sending illegal content over and over and the next block is never attained.

Maybe I am misunderstanding the process.

I think it will not be a 'denial-of-service' attack but a 'denial-of-decentralization' attack. You can modify an old block and skip all the signatures calculation if everyone agree to take the last block as valid in spite it has a broken chain of calculations. Somewhat similar to the ETH/ETC hard fork.

But there has to he some kind of centralized group that bless the new block. Also, a new client and miner software must be released. Perhaps a new version every time an illegal item is included, or perhaps the program can check the list automatically in a website. In both case, it will break the decentralization.