Blockchain to Send and Store Data

Not many people know that besides transacting and storing value, the bitcoin blockchain offers an option to 'send data' instead of currency and store small amounts of data in the blockchain.

To store data in the blockchain you just send a transaction, but instead of sending it to another bitcoin address you send a Null Data transaction with a zero value output. So 1 of the outputs does not contain an amount and address, but a message and an amount of zero.

A Null Data transaction and consists of an OP_RETURN byte followed by the length of the and then the actual 0 to 80 bytes of data.

The output amount of the Null Data output is zero, but the transaction still requires an input with enough value to cover the transaction fees.

How to Send a Message Transaction

As far as I know there is no GUI wallet offering the option to send a data transaction at the moment, but with some code and the Python BitcoinLib it is easy to do.

from bitcoinlib.transactions import Output
from bitcoinlib.wallets import wallet_create_or_open
from bitcoinlib.encoding import varstr

wallet = wallet_create_or_open('Messenger')
wk = wallet.get_key()
wallet.utxos_update()

if not wallet.utxos():
    print("Please deposit to %s to start creating Nulldata transactions" % wk.address)
else:
    lock_script = b'j' + varstr(b'Please leave a message after the beep')
    t = wallet.send([Output(0, lock_script=lock_script)])
    t.info()

The locking script of the Null Data output starts with the OP_RETURN opcode followed by the data string. The data string can contain anything you like, a size byte is added by the varstr() method.

Nulldata acceptance issues

Not all Bitcoin nodes and Service providers accept Nulldata transactions or accept only Nulldata with a maximum size of 40 bytes. If you encounter this problem, you could set up your own bitcoin node and use this or specify an service provider when sending the transaction.

Where can this be used for?

Besides tagging the blockchain with your graffiti this has some useful applications. The blockchain is a timestamped database of records which cannot be modified or deleted after they are included in the blockchain. This is nice (and necessary) for storing value but can also be used to prove existence of a document on a specific date: a renting contract or birth certificate for instance.

On the Proof Of Existence website (https://poex.io) you can store a hash of any document, which proves the existence of a document on a specific data. And in my article: " Proof existence of documents using Nulldata " I explain how to do this yourself with BitcoinLib.

But Null Data messages can also be used to build another layer on the blockchain network to store assets or other crypto currencies. Colored coins (https://en.wikipedia.org/wiki/Colored_coin) or Counterparty (https://counterparty.io) are examples of this.

Read your message

You can use the BitcoinLib to retreive transactions and read nulldata messages. Some block explorers such as smartbit.au.com and btc.com also show decode nulldata messages.

I couldn't help it and embedded the Python script above in the bitcoin blockchain. The script has been split up in seven parts as one nulldata script can only contain 80 bytes. And a transaction can only contain one nulldata script, so seven transactions are needed. The first byte in the script is used to determine the order.

The python script can be found in these 8 transactions: c6960cd3a688db18550c06b08ed744382cfc9abce63cf6f97981e4b61bba81dc 7af7bea324b9cf4d6692d7b63518c076c55616c7943310dec9c23b2435ca4609 31328c4e23abd547e4b6f49546a584ed969ed9b106f177f06365ea8f2222d576 8f0551fd70fa8cb4a92121277fdab51e88856c669a1ae4a8143c1ccf1fce3d26 2bb9e14d2005bd633e632399c702bcbd8438f0a4ea636400a6efceb14b8d14d0 055a22998664a6ffb5bddb7db38933bded2442c22991ea76dd363a1265ec4967 da6fc4129b7fcd1c79fe9d96cb128c9edca897090048ff7b136ffcaf3baf50c6

Technically you can create a transaction with multiple nulldata scripts. Such a transaction is considered valid but is non-standard and will be rejected by most bitcoin clients.