Tag : Protection

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GDPR Could Spell Disaster for Blockchain Innovation


In a report, the European Union Blockchain Observatory and Forum has made a warning about the GDPR law. The General Data Protection Regulation law came into effect just a couple of months ago and it can cause major problems for the development of blockchain technology.
The EU based blockchain body has stated that there is certain haziness in legal matters. The GDPR law and blockchain technology cannot exactly see eye to eye. The aim of the General Data Protection Regulation is to protect the data rights for individuals. It is also aiming to make free movement of personal data possible within the single market.
According to the blockchain body, as long as the legality between the GDPR law and blockchain technology will remain unclear, there will be problems. The people looking to innovate blockchain technology-based platforms, in and around Europe, will face a lot of uncertainty. The challenges that will come along because of this will be massive. It can become a significant roadblock for the further innovation in the blockchain landscape. Because of this, all the work done by Europe in this field can be stopped.
Data Protection Rights for Individuals
You see, there is one particular point emerging from the General Data Protection Regulation. It will empower individuals to have more control over their individual data. They will be able to amend their data so that it retains a certain sense of accuracy. There are even cases where the GDPR allows them to get the data deleted when they don’t need it anymore. This all sounds very good in terms of individual data protection rights. The problem is that blockchains are immutable databases. Once a record is added, it cannot be changed, modified or deleted. Only more data can be added to it.
When it comes to the GDPR, protection of individual data rights is based on the concept of a central authority. This central body will be held accountable for the protection of the data if things go sideways. When it comes to blockchain, matters are different. They are open and permissionless. All the information on the blockchain is processed by every node on the network. There has never been the concept of a central node or controller. The network works together in a democratic manner to process and verify all the records being added to the immutable database. This is yet another point where the General Data Protection Regulation comes into conflict with blockchain technology.
There is another stipulation. The GDPR can apparently be transferred to third parties outside of the EU based on a condition’s fulfillment. It will only happen if the data is held in a jurisdiction, which offers data protection laws of a similar level as theirs.
Blockchain technology does not function that way at all. There is absolutely no way of regulating where the data will end up. The full nodes across the network exist everywhere in the world. Each of them have a full copy of the database because it’s replicated throughout the network all at once. There is no way to stop this as it’s a purely decentralized digital ledger.
Selective Use VS. Full Replication of Data Set
Another source of conflict is that GDPR was announced even before blockchain technology became popular.
It makes sense. The General Data Protection Regulation was penned down before blockchain technology became commonplace. There was the assumption that a database is nothing more than a place where data is collected, stored, and processed.
When you look at the situation in an optimistic light, you have to remember the fact that blockchain is still in its infancy right now. There is always the chance that it can be developed to ensure the implementation of the GDPR fully.
It remains to be seen how things play out between the disruptive technology and the data protection law.