The flaw in all of this is that you're embedding 20 bytes in the blockchain. In order to do that, you have to choose an encoding method. In order to get the embedded data back out, you have to convey the encoding method and which block is encoded with it to the recipient. Which is totally pointless because if you can convey that to the recipient then you might as well just use the same communications method to convey the original message. The only plausible reason not to would be if the law prohibits the message but not the information about how to construct the message from the blockchain (and even that is not guaranteed). Even then all you would accomplish is to cause the government to pass a new law that prohibits you from telling anyone that a prohibited link is encoded in the block in the same way that you're currently prohibited from telling anyone the link itself.
The real problem here is not that child pornographers would actually use bitcoin to distribute links, it's that assholes who want to damage bitcoin would put contraband in the blockchain in order to cause legal trouble for innocent users.
But I think that's a broader problem than just bitcoin. You can encode anything into anything. Take anything anyone else has posted and xor it with something you want to encode. The output will resemble garbage rather than either input. But now you can post the "garbage" and instructions on what to xor it with to allow anyone to recover your encoded message, and the poster of the other message becomes an unwilling participant in your encoding scheme. It clearly makes no sense to punish distributors of the original message just because the encoded message is contraband. Which doesn't mean there won't be laws that will punish it anyway, but that is the fight that needs to be won -- to not allow stupid laws that would punish innocent people.
The real problem here is not that child pornographers would actually use bitcoin to distribute links, it's that assholes who want to damage bitcoin would put contraband in the blockchain in order to cause legal trouble for innocent users.
But I think that's a broader problem than just bitcoin. You can encode anything into anything. Take anything anyone else has posted and xor it with something you want to encode. The output will resemble garbage rather than either input. But now you can post the "garbage" and instructions on what to xor it with to allow anyone to recover your encoded message, and the poster of the other message becomes an unwilling participant in your encoding scheme. It clearly makes no sense to punish distributors of the original message just because the encoded message is contraband. Which doesn't mean there won't be laws that will punish it anyway, but that is the fight that needs to be won -- to not allow stupid laws that would punish innocent people.