How Troubled Can the Relation between Blockchain and GDPR Be?

The Hard Fork Decentralized event will be open from 12 to December 14, and one of the primary discussions the event will be focusing on is related to the concerning relation between blockchain and GDPR.

Permissioned vs Permissionless

The Next Web, a Fintech focused News Hub, is organizing Hard Fork Decentralized, its own blockchain and cryptocurrency event. According to the Agency, apart from focusing in the cryptocurrency industry greatest challenges, the event will also be centering its attention on the relation between blockchain and GDPR and how blockchain can stay compliant with General Data Protection Regulations (GDPR).

There is a battle is going on within the blockchain industry. This battle is opposing two sides that have their own vision of what the future of the blockchain should be. There are those who see private blockchains as a possible solution to several problems while others are completely against this idea as it contrasts with the true nature of the blockchain technology which is based on the notion of decentralization.

Vitalik Buterin also expressed his concerns regarding this issue early this month during the Ethereum annual conference when he said that IBM’s commercial blockchain offerings are “totally not the point…” as he believes blockchain should be open, transparent, and owned by everyone participating in the network.

So, can we actually consider a private ledger a blockchain? Following Vitalik’s notion, many will argue that private or permission blockchain networks are not really blockchains while others are staying ahead of this discussion by defending the idea that this doesn’t matter at all. Permissioned or permissionless, they are both two different forms of the same technology and perhaps one alternative can have a better performance when it comes to staying compliant with the GDPR while the other will find a lot of barriers to complying.

In a way, we cannot completely agree that blockchains controlled by a centralized entity are truly decentralized. While Blockchain puritans are right when they argue that “putting a blockchain inside the metaphorical walls of a corporation seems counter-intuitive” and that was not the original idea of Satoshi Nakamoto’s vision. Nevertheless, in a world that needs to cope with privacy and security and stay GDPR compliant, permissioned ledgers will probably be a way to help with compliance. That means that we will need to find ways for these two forms to cooperate and accept that private blockchains might have a use after all.

The real problem here is that in some cases public blockchains will not be able to retain sensitive data and that might compromise their compliance with GDPR. But on the other hand, public blockchains are immune to censorship and there is no way or would be incredibly difficult, to sanction a non-compliant blockchain. But this takes us to yet another question: how will government’s fine decentralized entities?

How can a decentralized entity be sanctioned?

The EU already referred to this issue and came to the conclusion that private, permissioned blockchains are probably the only way to keep decentralized technology compliant with GDPR. This might come as a hindrance to the technology itself as companies wanting to get into the technology will flee to safer and complaint blockchains.

Even so, there are still much to discuss and permissioned ledgers will certainly not be the only way for companies working in the niche to stay complaint as there will solutions popping out anytime soon.

But the Hard Fork Decentralized event will not only focus on regulation and there will be lots of other topics to be discussed. The event will take place in London on December 12-14. Interested parties can check out the full list of events, which will be hosted by the leading industry companies, and there will be lots and lots of discussions.