by Priyeshu Garg
Full Story: https://btcmanager.com/new-european-privacy-laws-could-spell-doom-for-blockchain-businesses/
Full Story: https://btcmanager.com/new-european-privacy-laws-could-spell-doom-for-blockchain-businesses/
A new set of regulations concerning data protection could have a negative impact on blockchain applications in the European Union (EU). One of the fundamental operational premises of most blockchain-based applications is in danger of being against a new European law on privacy.
The record of transactions on most blockchains can be viewed by the network participants. These records are once authenticated, become immutable, meaning that they cannot be altered or removed. This immutability is one of the strong points of the technology and a reason while cryptocurrencies like bitcoin and ether have become popular.
The European Union General Data Protection Regulation (GDPR)
The European Union recently issued a new set of data-handling regulations as an update to its General Data Protection Regulation (GDPR). These new regulations which take effect from May 25, 2018, basically deal with how the sensitive information of users is handled by companies.
As part of the new regulations, companies must comply with the request of any EU citizen to completely delete his/her user information stored by the company. It is a landmark ruling which throws light on a topic that has been brought to the forefront particular in the aftermath of the Cambridge Analytica and Facebook controversy.
While this move would mean user data now firmly belongs to the user, it could spell doom for many a blockchain businesses operating in Europe. According to Michèle Finck, an Oxford University lecturer specializing in EU law, blockchains in their current operational architecture are not compatible with the new GDPR:
“On a tamper-proof ledger, these rights cannot, however, be easily implemented. It is safe to assume that at present most blockchains are not GDPR compliant because they are unable to implement these rights. A number of technological solutions are currently being developed that might facilitate this in the future, but we are not there yet.”
According to her, EU regulators face the choice of either banning blockchain apps from Europe or tweaking the GDPR to offer some exceptions for blockchain apps. Blockchain companies might be forced to look for ways to delete data from the blockchain after it has been vetted, something that is, for the most part, theoretically impossible.
Greg McMullen, a German-based lawyer, says blockchain companies will be faced with immense compliance headaches due to the new regulations. He also went to say that the move will most likely impede the development of blockchain-based applications. Developers and entrepreneurs will face the hard task of trying to ascertain if an application should be built on a blockchain in light of the new laws.
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