Image courtesy wix.com
On 27 May 2018, the European Union will enact a comprehensive set of rules called the General Data Protection Regulation (GDPR). Within the pages of this hefty upgrade, legislators outline what is required from anyone doing business with people who reside in the European Union.
Those organizations failing to meet the data privacy requirements outlined in this legislation will pay fines—€20M/$23.5M U.S., or up to 4 percent of annual worldwide turnover [revenue].
The good news for businesses that are in, or soon to be in, Europe is that blockchain technology promises to eliminate some of the fundamental problems that make the GDPR even necessary.
The problem with stored data
Data cannot be leaked if it isn’t stored in a centralized location. Server rooms or even physical records become obsolete in peer-to-peer transactions. With blockchain, third party intermediaries are no longer required.
Instead, automated smart contracts will enable safe execution of exchange throughout all stages of a blockchain transaction. Buyers and sellers will be allowed complete anonymity, if they choose, without jeopardizing trust or financial integrity.
Blockchain transactions are:
Transparent only to a predesignated list of parties
Do not require 3rd party sanctions, such as banks or attorneys
To give a greater context to this new regulation, here are some of the basic data privacy rules contained in GDPR.
GDPR Data Protection Basics
Under GDPR, data includes an expansive list of a data subject’s personal details:
an online identifier—email address or IP address
physiological or mental information
social identity [for example: social media]
It reads like a laundry list of catch-22s for doing business. Information necessary for online financial transactions is included.
Note: a catch-22 is a dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.
Keep in mind, the emphasis to all of this is that the data subject be allowed maintain control over who sees their personal information and why. Consent must always be a prerequisite.
Each company is required to provide a data privacy officer DPO to ensure the rights of the data subject have been maintained.
If no data is stored and the parties transacting are anonymous, most of these potential problems will be eliminated. This new wave of blockchain could not come at a better time.
Everything on the blockchain, a distributed digital ledger, gets encrypted every 10 minutes. This process, called hashing, makes unwanted access harder and harder for bad actors the further you get from the transaction.
This upcoming wave of blockchain technology is doing much to ease concerns going into the full GDPR enactment at the end of this month.
Blockchain developers have much to look forward to from organizations with business concerns inside of the European Union.
If you’d like to learn more about Lantah and our PreICO, feel free to contact us at firstname.lastname@example.org.