Blockchain for Personal Data Security

Personal data regulations such as GDPR can impose various compliance obligations on organisations that process personal data, making compliance issues an important consideration for supply-chain stakeholders. When considering whether the regulations apply to their blockchain solution.

Some scholars have dedicated themselves to designing a general blockchain-based web service framework in order to increase users’ data control abilities when using web services.

Transparency

Transparency is at the core of blockchain technology. Individuals can now monitor how their personal information is being utilized without having to depend on an intermediary, building trust and confidence in digital interactions.

Bitcoin does this using a complex algorithm which records transactions as immutable, permanent and irreversible digital records in a distributed ledger that cannot be altered. Furthermore, this record is validated by an international network of computers instead of just one entity, making hacking harder to achieve.

Privacy concerns are addressed similarly, as blockchain’s immutability reduces the risk of personal information being shared with unauthorized parties or misused by hackers. Furthermore, it helps safeguard privacy by keeping sensitive data encrypted end-to-end across multiple computers – making it harder for hackers to view it.

As organizations adopt blockchain solutions in supply chains that handle personal data, this should be of primary concern when considering them for personal data use. GDPR assigns responsibility for overseeing treatment of personal data or paying penalties when obligations are breached to both “data controllers” and “data processors”, but where there is no centralised service provider such as in a blockchain network there may not be anyone responsible to oversee or pay penalties when breaching them occurs.

Blockchain’s transparent nature poses another obstacle to compliance with data protection and privacy regulations. While its addresses are pseudonymous, sophisticated analysis techniques could use this data to connect activities back to real identities – potentially violating data protection and privacy laws such as GDPR.

Integration with blockchain can enable organisations to address these challenges by giving individuals full control of who has access to their personal data and who may see it. Smart contracts provide one way of doing this by automatically executing agreements between parties; blockchain-based access control mechanisms like Ring Confidential Transactions provide another. By using multiple features in combination, privacy policies can be enforced effectively. Transparency and preference adherence are integral parts of privacy protection and can be implemented across a variety of use cases such as government and voting systems, healthcare delivery networks and digital identity management platforms.

Decentralization

Decentralization enables blockchain networks that are more resistant to attack. For example, in centralized systems customer information is stored at one central point, making them vulnerable if that company were to go bankrupt and the entire system go down with it. By contrast, decentralized networks comprise many smaller components which are spread throughout their respective networks making them less susceptible. Furthermore, immutability of blockchain ensures data cannot be changed making it harder for hackers to compromise it and compromise your network.

Decentralized networks offer businesses new opportunities to engage with customers in a trust-driven manner. Instead of forcing customers to agree upfront to use personal information for targeted marketing campaigns, customers can allow companies access the data needed for effective targeting marketing campaigns and share it with whomever they please; such explicit consent creates a stronger ethical foundation for using data for marketing practices.

But, due to its decentralized nature, blockchains may present difficulty for compliance with privacy laws. GDPR places obligations on “data controllers” and “processors.” In a decentralized network where an original data controller no longer controls personal information, determining its use could become complicated.

Decentralized systems offer substantial security benefits; however, their operation requires greater computational power than centralized ones and as a result may run more slowly than their centralized counterparts. Furthermore, decentralized systems may experience increased network latency or errors due to having more nodes connected in an interdependent fashion.

One potential difficulty associated with blockchains is their decentralized nature makes it hard to assign fault when errors arise on them. While their protection from tampering is unparalleled, their recording all changes could lead to confusion over who is accountable for identifying incorrect data and correcting it.

Decentralized blockchain networks have proven their worth despite these difficulties, as supply chains increasingly adopt them to manage supply chain processes more transparently and with consumer control of their data at the forefront. This represents a dramatic transformation of how businesses manage customer relations while opening the way to an era of ethical, consent-driven personalization.

Confidentiality

Due to the increasing frequency of cyber attacks against connected devices and personal identifying information, there is an urgent need for new methods of protecting IP, health records, and financial data. Blockchain – the underlying technology behind cryptocurrency – provides such protection by making manipulation or deletion impossible.

Blockchains’ immutability makes them highly difficult for hackers or unauthorized individuals to change or access the data stored there, while encryption protects from unwanted access. Furthermore, decentralized networks such as blockchains reduce single points of failure.

Enhancing Privacy

Blockchain-based communication networks will allow individuals to directly share data among themselves, eliminating intermediaries and decreasing the risk of unauthorized access and exposure. Furthermore, smart contracts on a blockchain can automate processes while upholding privacy policies – further improving privacy.

Blockchains offer another effective method to improve privacy: transparency. Users of the network are able to view all transactions that take place, which reduces risks related to hidden agendas or secret data sharing. Transparency ensures that the purpose of collecting personal information is clearly communicated to its subject as well as promote accountability for data collection practices.

Blockchain can make it challenging to uphold data subjects’ rights to access and correct their personal information, particularly if their original personal data has been hashed or otherwise obscured, since it may be difficult to ascertain from its hash whether the original information has been deleted.

To address this problem, one potential solution may be storing only a hash of personal data on a blockchain and then moving it off-chain once it has been altered or destroyed – this allows original personal information to remain easily accessible while meeting GDPR compliance standards. Supply chain applications where GDPR compliance is more of an issue will find this approach especially suitable.

Obfuscation

Obfuscation is a method used in computer security to prevent an attack payload from being discovered by network protection systems. This works by transforming data into an unreadable format that makes it harder for hackers to understand and analyze, as well as decreasing server-client transfer sizes. Unfortunately, however, obfuscation doesn’t stop online tracking entirely: hackers still may track user activity through other means, such as cookies.

Blockchain technology has long been touted as the next-generation of databases that will facilitate secure transactions between unknown parties, yet all information stored on a blockchain network can be seen by anyone with access to it – something which may not pose much of a problem for most supply-chain organisations; however, such transparency could pose serious privacy concerns for other forms of data; for example if personal information were contained within it then using it in Canada for any purpose without their express permission would be illegal.

One major difficulty associated with blockchain data resides in its immutability, which can create compliance challenges when adhering to GDPR regulations that impose obligations on data controllers (in this instance, blockchain users). GDPR regulations mandate data be stored only as long as necessary to fulfill the goals for which it was collected; if data stored permanently would violate GDPR and make complying with rights like “right to forget” impossible – posing additional difficulties and possible breach.

There are various solutions available to address the concerns related to data protection. Storing personal data off-chain with on-chain hashes and adopting role-based access controls can help satisfy GDPR requirements, while pseudonymisation or other techniques may also help safeguard personal information. These should not be seen as silver bullet solutions to GDPR and data protection challenges; professional legal advice should always be sought on an individual basis.