Custom tools can be used to extract any data from almost any other kind of other data, using steganography. You can extract illegal data from innocuous looking tweets, using the right tools.
It's the difference between taking random bits of your computer to assemble illegal content vs taking one specific set of bits and applying mere transforms to then to retrieve illegal content.
For example, I don't think it's a defense for the owner of a website to say "this horrible illegal content I'm sharing is only accessible via a custom tool that downloads and decodes image data from me...such as a web browser."
Your arguments seem to be of the nature of "information is information; you can't suppress it and you can't make it illegal" but that's not really what this discussion is about.
the "key" is a very simple algorithm, that is obviously not illegal
My point is that you could unknowningly store illegal data, without blockchain being involved.
Anyone sharing the data by torrenting an apparently legal file, reposting an image, or quoting a text could redistribute potentially illegal data.
This problem is not constrained to blockchain.
The problem with blockchain is that a full node will be knowingly storing and distributing illegal content (or at least is likely to held to be, once the chain is widely known to be infested with such content.) The only way to.stop is to stop storing and interacting with the chain.
With a torrent, you could be unknowingly doing so, but very easily stop doing so with the particular content once you discovered it (without abandoning torrents altogether), which may or not be a complete bar to liability but would probably result in generally more lenient treatment in any situation other than the government is targeting you and the actual offense is pure pretext, in which case the content hardly matters.
And which subsets of illegal data are legal?
The problem with the blockchain is actually its greatest strength: it's immutable. If somebody reports a block containing child porn there's no way to remove it without compromising the blockchain's integrity.
The number "Pi" contains all hate speech and other illegal content imaginable.
>The number "Pi" contains all hate speech and other illegal content imaginable.
That's irrelevant. If you don't think so try downloading child porn, get caught and argue that "it's just decimals of Pi!". Report back with results.
That's the problem with the blockchain: there is no mechanism for deleting data (well, there's pruning, but that's meant to save storage space after processing all the data).