Blockchain has emerged to primarily revolutionize digital financial and monetary transactions. Despite its advantages in creating automated records and markets, since it’s a technology that’s still in development, it doesn’t yet have specific legislation. This poses a conflict with data privacy and security.
At MIIM, we explain the relationship between blockchain and data privacy to help you understand the current situation of both.
What does blockchain mean?
Blockchain is a cutting-edge technology based on a chain of blocks that stores automated data. Additional data from other previous blocks are added to the data, creating a permanent and unchangeable record of information. The data is encrypted, securely stored, and impossible to modify, lose, or delete without consensus from all participants.
One of the most significant advantages of blockchain is the transparency it offers in transactions. Both the inputs and outputs of transactions are captured, helping identify the user’s IP address and, consequently, the transaction’s owner.
How does blockchain impact data privacy?
However, can data privacy be guaranteed when using blockchain technology? It’s clear that blockchain is secure and transparent, but it has certain incompatibilities with provisions in the General Data Protection Regulation (GDPR).
Here are the clashes between blockchain and GDPR:
- Data controllers: It’s unclear who the data controllers are since each participant in the network has direct access to the transactions and, consequently, the information.
- Immutable database: The information stored in blockchains, despite being done with the user’s consent, cannot be erased. This means that once it’s recorded, it cannot be deleted. This is called data immutability, which contradicts data protection in blockchains and the right to be forgotten (explicitly addressed in GDPR).
From this, it can be concluded that blockchain technology aids in transaction transparency on the internet but not in terms of data protection.
At MIIM, we patent and register your business idea to ensure no one can take it away or plagiarize it. We use blockchain to protect and certify your idea. Feel free to contact us for any inquiries.