A blockchain is about to reach the threshold of success, though controversies continue to come due to its complexity. IT leaders track its all characteristics to understand how it can reshape vertical markets.
Now, crypto enthusiasts are asking whether blockchain will become the European Union’s General Data Protection Regulation compliant or not. On May 25, the GDPR privacy regulations come into sight and were implemented on the many US and multinational organizations.
GDPR is one of the most sweeping privacy change many industry leaders have faced till now, dealing with it by paying large amounts.
Why Blockchain and Privacy manifesto?
Immutability of blockchain is a fundamental characteristic that makes it a good fit for businesses, says Red Hat technology evangelist, Gordon Haff. When something is uploaded onto blockchain, you cannot reciprocal and remove it. This is probably one of the reasons that captured the attention of developers for supply chain, financial, and legal uses.
In contrary to it, GDPR guarantees a person’s right to be forgotten in order to remove personally identifiable data. This benefits a consumer during a breach, for example, he/she does not have to worry about passwords used in an online store.
As GDPR comes into effect, what areas should industry experts be watching for regarding blockchain?
Security of data
Most blockchain experts believe that a blockchain is so powerful that it could have even prevented the Facebook/Cambridge Analytica scandal from happening if it would have been implemented properly.
Storing data on centralized servers is far more risky as compared to data stored on a blockchain, which is further distributed around multiple nodes to ensure high security throughout the distributed network.
Smart contracts keep a check on how data is released and private encryption keys allow users to control the release of data. Users do not need to worry about data even if they have given consent to a third party to use it as they have complete control over it.
The rigid network of blockchain ensures that nobody can tamper with data after its recording. Therefore, blockchain is reliable when it comes to comprehensive data privacy.
The inconsistency of a blockchain with the GDPR
Presently, the focus of regulatory is on the cryptos trading and the financial regulation of ICOs. Recent speculations reveal that the GDPR can become a problem for blockchain and data privacy.
The inherent immutability of blockchain is a major problem as we cannot go back in time and remove data once it is uploaded.
Moreover, the GDPR insists on the need for a data controller to manage such user requests. Blockchain is a decentralized database, which involves more than one person for data management.
Solving the Conundrum
We need to consider some points here. The first point is the actualization of the GDPR that has taken years during which significant developments in blockchain could have been done. Campaign groups have already started lobbying for Bitcoin to stay away from the GDPR.
EU legislators are likely to react towards such campaigns by presenting various implications for blockchain technology. In case it happens, provided how long it took for the legislation to come into effect, it may occur slowly.
Government regulations are important when it comes to accountability, ensuring ethical use of data while penalizing scammers through enforcement mechanisms. I am not arguing against the GDPR. Rather than a cooperative approach to policymaking, regulators should focus on future-flexible frameworks for governance to optimize data security no matter how much bigger a mining pool is.
About the guest writer – Varun Dutta writes crypto articles for entrepreneurs that want to make the most of the crypto world. His articles focus on balancing informative with crypto needs–but never at the expense of providing an entertaining read. His passion for crypto has turned out to be an inspiration for many naive writers who look for unique and simplified solutions to understand crypto at the core.
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