When GDPR was first outlined in 2012, blockchain would have barely registered on their radar—instead, they sought to combat the unfettered data collection of social networks and cloud services. But these are organized centrally - so users who generate data interact with a centralized server - which makes it far easier to enforce regulation. The issue with public blockchains is that they aim to be decentralized.
There is a concern that blockchain technology is incompatible with GDPR, which came into effect in May 2018. The issue is not only that data is permanently stored on a ledger, never to be deleted, but that by nature it exists on a blockchain which is irreversibly tied into the entire network.
The immutable nature of the blockchain makes it a winner on security and transparency; it is nearly impossible for ledgers to be altered in a way not immediately obvious to all involved parties. However, GDPR dictates that data must be kept private at the user’s behest.
This is where access control becomes key. Once a dataset is stored, it needs to be exclusive - so only permissioned users can see it - and, if possible, kept separate from other databases on the network.
There may be a way out with sidechains. Sidechains are seen as one of the next breakthroughs in blockchain technology mainly for the fact that they could process thousands of transactions per second, in stark contrast to the twenty or so that Ethereum is limited to.
But it could also promise an easier way to segregate data into sets which are hidden from the network as a whole. On a sidechain, only neighboring nodes are really needed, whereas Bitcoin and Ethereum-based networks require each transaction to be seen and recognized by the entire network inside mineable blocks.
Simple smart contracts
Determining which network users can access the functionality of a smart contract can be managed by access control lists within the smart contract. This is useful anyway as the majority of data stored is not relevant to most other network participants.
Many blockchain solutions still carry some challenges around privacy, among others, namely in problems of scalability as previously mentioned. But the advantage of an isolated sidec...
This article appeared first on Cryptovest
