Know How The New Privacy Law of EU Will Impact blockchain
Apr 02, 2018 Posted / 1953 Views
The biggest change since brexit in EU will happen now when the EU will revise its privacy laws, last done in 1995. The new framework, entitled the General Data Protection Regulation (GDPR), comes into effect on May 25, will change the lives of many.
The GDPR law aims to give the individual its control on data and puts the government away (to some extent).
Under this law, all the organisation have the option to store the data, but after following the data privacy norms that will be set. Failure to do so will result in fines based on the severity of the breach, the character of the infringement, and the organization’s compliance protocol. The most egregious offenders will face hefty fines up to 20 mln euro or four percent of their annual revenue, whichever is higher.
This law will apply to all companies working irrespective of their physical location (present in EU or not), however this remains a doubtful question as this is tough task to regulate a company outside EU boundary.
Impacts on Blockchains?
Blockchains are decentralised data storing units, which create an ambiguity if they will be regulated by blockchain or not. While the GDPR is intended to be technology agnostic, it was drafted with the assumption that personal data would be stored with traditional centralized parties who could easily manage the data in accordance with the GDPR framework. But when it comes to Blockchain, it is unclear how decentralized networks across the globe will be able to implement all of the GDPR standards.
However it is clear that GDPR and blockchain do not get along because of the requirements set by the GDPR law.
Dave Fragale, the co founder of Atonomi states that “GDPR presents an opportunity for EU citizens to exercise control over their personal data. From a Blockchain perspective, this aligns well with the community’s ethos of moving away from central authorities. However, technologically, this conflicts with Blockchain’s immutable ledger and decentralized data storage architecture.”
While the world simply won’t stop, other possibility being discovered is the possibility of the off chain data storage is being considered now. This means personal data is stored in a blockchain which is not accessed by someone else unless authorised.
Serafin Ellion of datawallet explains that, “An interesting solution to the problem is a dual data handling architecture, where contractual elements of a transaction happen on-chain via smart contracts and the actual data transfer happens off-chain. This also solves scalability issues we're facing with Blockchain technology in its current state.
I think GDPR is a great step towards the future of a data empowered user, specifically by requiring companies to allow users to download it and move it to other platforms, or even delete it entirely and there are definitely companies, like Datawallet looking to ensure this necessary regulation and exciting technology don't need to be mutually exclusive.”
The effect on blockchain will be observed after some time which apparently can be a lot as it may arise due to its nodal architecture which many people do not realise right now. Some are even governed by decentralized autonomous organizations (DAO). These novel governance systems don’t work in the way EU regulators contemplated. Who within a Blockchain project can ensure that each node complies with the GDPR standards for privacy?
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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