This is a possible scenario as what STEEM is already acting "EXACTLY" like piratebay.org in many scenarios. Technically TPB also doesn't host any content but just host "pointers" to content. Even if we consider that the blockchain is not storing images converted to a ascii or so, its already pointing to S3 buckets, IPFS (dmania, steepshot) etc. So the STEEM blockchain and thus the witness servers are acting exactly like TPB. Now Personally I think storing torrent files to "pirated" content is an offense, from the experience of numerous issues related to Torrents, Tor nodes, i2p nodes, weird case of PureVPN [2], Lavabit [3] etc we have seen that the technical details are interpreted as required by the pressure put by the lobbying groups.
Even if we try to resit with Tor or other means its not going to easy to resist a take down. Its going to be cake walk to take down the entire witness servers with the existing lawful interception capabilities.
Given that Steem is specifically intended to transmit publicly written posts and can also include encoded images as part of that
Because of the points mentioned above as well detailed in a link below, We don't necessarily have to store images or content in the chain to be liable IMHO.
I think we just have one more threat apart from the already existing possibility of DMCA take down as discussed here : scenario : DMCA takedown of STEEM blockchain
References:
- TPB raids
- https://www.theregister.co.uk/2017/10/08/vpn_logs_helped_unmask_alleged_net_stalker_say_feds/
- https://en.wikipedia.org/wiki/Lavabit
PS: I worked in the network domain and unfortunately familiar with "lawful" interception :-(