Blockchain technology is known to be making a very great impact due to its features especially its privacy. However, the very features that make blockchain technology a darling too many, seems to be causing headaches with both authorities and some enterprises.
Although blockchain networks provide users with a very high degree of privacy, the stored public ledgers are irreversible. Experts warn that this ‘privacy poisoning’ is the biggest risks facing organizations, centerpieces, and governments.
Blockchain privacy poisoning: what is it?
The European Union recently came up with the General Data Protection Regulation (GDPR), which states that every individual has “the right to be forgotten”. However, this is practically impossible with blockchain networks since you cannot alter the content of the ledger files stored in a blockchain network.
Blockchain privacy poisoning refers to the poisoning of blockchain networks with personal data that cannot be deleted as per the GDPR.
The fact that blockchain networks provide a solution for storing original data in a manner that it cannot be adulterated, the same advantage creates a major problem for organizations, especially in the European nations. You have personal data on a network, but it is impossible to destroy that data. If the data is deleted, it would mean compromising the entire blockchain. Blockchain is a chain of blocks that contain ledger files.
Initially, blockchain privacy poisoning was not a major issue since the only information that was predominantly stored on blockchain networks was transaction detail. However, with the adoption of blockchain technology across different fields like medicine, industries, and businesses, other information is being stored in blockchain networks.
One of the key areas that blockchain technology is being used is in consent management. Blockchain is being used in the proof of consent and in the coming years this will see a widespread application. However, this is double-edged since the information provided by the user for the proof of consent is irreversible or cannot be deleted without destroying the entire blockchain network.
Does blockchain privacy poisoning apply to private blockchain networks?
There are two types of blockchain networks; the public blockchain networks and the private blockchain networks.
For public blockchain networks, anyone can access the network and participate in the networks but the information entered in the network cannot be altered in any way. This squarely falls under the GDPR.
Private Blockchain networks, on the other hand, can only be accessed by those who have been granted permission. The users and the kind of transactions are restricted. They are mostly used in military, national defense, supply chain management, construction, filling returns among other places. The GDPR laws do not apply when it comes to private blockchain networks.
Normally, if any private data is shared through the private blockchain networks that information would never be available to the public contrary to the public blockchain networks. Therefore, even if a private blockchain network becomes “poisoned” by the personal data, it somehow doesn’t really matter.
What does the future hold?
One thing is for sure: new regulations especially those aimed at regulating individuals’ privacy could pose major complications when it comes to blockchain implementation. The GDPR has already proved that such rules might not apply to blockchain technology although experts could also opt for a way to make blockchain comply with such rules. The question is when?