The Evolution of Embedding Metadata in Blockchain Transactions

Abstract

The use of blockchains is growing every day, and their utility has greatly expanded from sending and receiving crypto-coins to smart-contracts and decentralized autonomous organizations. Modern blockchains underpin a variety of applications: from designing a global identity to improving satellite connectivity. In our research we look at the ability of blockchains to store metadata in an increasing volume of transactions and with evolving focus of utilization. We further show that basic approaches to improving blockchain privacy also rely on embedding metadata. This paper identifies and classifies real-life blockchain transactions embedding metadata of a number of major protocols running essentially over the bitcoin blockchain. The empirical analysis here presents the evolution of metadata utilization in the recent years, and the discussion suggests steps towards preventing criminal use. Metadata are relevant to any blockchain, and our analysis considers primarily bitcoin as a case study. The paper concludes that simultaneously with both expanding legitimate utilization of embedded metadata and expanding blockchain functionality, the applied research on improving anonymity and security must also attempt to protect against blockchain abuse.

Visualizing the Bitcoin's OP_RETURN operator

“…In addition, our system provides the user with advanced searching capabilities that can assist for the identification of protocols using (misusing) 3 https://www.omnilayer.org/ (accessed 2020-06-29) Table 1). We welcome the reader to explore the Bitcoin's OP_RETURN operator via our proof of concept website 4 or make use of the open-source code for their own deployment 5 .…”

“…On the one hand, Bartoletti and Pompianu [2] performed an empirical study on the (benign) usage of OP_RETURN by various protocols. On the other hand, Faisal et al [4] and Matzutt et al [5] provided an analysis of the operator with an emphasis on potentially illegal content and hidden files. Furthermore, Böck et al [3], following the steps of [1], provided an assessment of the threat of blockchain-based botnets.…”

A comprehensive survey on smart contract construction and execution: paradigms, tools, and systems

“…Faisal et al. 45 conducted similar work in 2018 and argued that OP_RETURN might be utilized by ransomware, serving as a certificate of payment. Their statistical results and classifications are similar to those of Bartoletti and Pompianu, 44 so we omit the details of their work here.…”

Dominating OP Returns: The Impact of Omni and Veriblock on Bitcoin

“…Although the description of the version release specifies that the introduction of the OP Return operator is not an endorsement for storing data on Bitcoin's blockchain, its recognition in the reference client is most likely a reaction to the increasing activity of storing arbitrary data on the blockchain using various inefficient methods [1]. 9 The OP Return is an instruction in Bitcoin's scripting language. It can be used in the locking script of an output.…”

“…That is, the amount of Bitcoin associated with the output of the OP Return transaction can be small 8 For a comprehensive analysis of the different techniques and their implications for Bitcoin, see [6,16], and [3]. 9 https://www.coindesk.com/bitcoin-core-dev-update-5-transac tion-fees-embedded-data. 10 This limit has changed over time.…”