Will GDPR block Blockchain?

European Commission GDPR

(European Commission, 2018)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Anne Toth, Head of Data Policy, World Economic Forum LLC

As someone who has worked in data policy and data protection for 20 years, I read privacy policies for a living. I take notice when I get the occasional email telling me that a website is updating their privacy policy or terms of service. Lately, that trickle has become a torrent in my inbox. The thing they all have in common is the effective date – May 25, 2018, the day the European Union’s General Data Protection Regulation (GDPR) goes into effect.

GDPR is a unified privacy regulation that largely harmonizes the various and disparate legal frameworks that cover the more than half a billion European data subjects, or as I prefer to call them, people. GDPR gives specifically articulated rights to people over their data so that the phrase, “you own the data about you” has meaning.

These rights are enshrined in European law but making them actionable has not been simple. Adding complexity to the task is the fact that technology has a habit of changing quickly. It’s well known that technology often leapfrogs ahead of existing regulatory frameworks, leaving legislators and regulators to play catch-up. Consider the example of blockchain.

Blockchain has existed as a concept since 2008 but it has only recently exploded into public consciousness through valuations of cryptocurrencies like Bitcoin. Many technologists believe that blockchain will be more transformational than the internet itself.

The global blockchain technology market is predicted to grow to 2.3 billion U.S. dollars by 2021

The global blockchain technology market is predicted to grow to 2.3 billion U.S. dollars by 2021

But whilst many people equate blockchain with Bitcoin and cryptocurrency, they are not the same. “Blockchain is a cryptographically-secured transaction record that’s created without a central authority,” explains the World Economic Forum’s Head of Blockchain, Sheila Warren.

Blockchain data can’t be deleted. So will its applications be illegal?

Because blockchain relies on a distributed ledger system that is decentralized and immutable, it’s intended to be a permanent, tamper-proof record that sits outside the control of any one governing authority. This is what makes it such an attractive and useful technology. But because data stored on the blockchain, including personal data, can’t be deleted, there is no way to exercise the right to erasure that people are granted under GDPR. Blockchain is not designed to be GDPR-compatible. Or rather, GDPR is not blockchain-compatible the way it is written today.

While European policymakers were debating and finalizing aspects of GDPR, blockchain wasn’t on most people’s radar. This is yet another example of where regulation is addressing a problem in the rear view mirror rather than looking at the road ahead. This is the nature of most traditional regulation and illustrates how quickly technology shifts, pivots and morphs at a speed much greater than laws and regulations are designed to move. In this case, while we wait for the rules to play catch up, the question we have to ask is whether existing blockchain applications that store personal data are now rendered illegal in Europe until this is sorted.

Policy needs to be as flexible as technology

Government regulation has a critical role to play in creating accountability, ensuring responsible use of data and providing enforcement mechanisms to penalize bad actors. I am not arguing against regulation, nor am I arguing against GDPR. I am arguing instead for a layered and cooperative approach to policy making. We need future-flexible frameworks for governance that allow us to realize the benefits of data and technology while minimizing harms. This is much easier to say than to do.

If our collective goal is to ensure a future where we cure cancer in our lifetimes through better medical research, improve infrastructure and service delivery in connected cities, increase crop yields to feed more people, better understand and predict extreme weather patterns, create durable digital identities for refugees and people who have no documentation of their existence, provide more immediate disaster relief in times of crisis – then we will need to use data more than ever to realize these benefits.

Governments must work in collaboration with civil society, academia and the private sector to co-develop policy with a process that is as dynamic as technology. Policy makers and the regulatory processes they use need to be reimagined to be as nimble as the technology they seek to regulate, in order to help create the future we all want to see.


the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

From UN Assembly podium, Central African Republic leader appeals for lifting arms embargo

‘Stop and listen’ to victims of terrorism, UN chief urges in message marking international day

ECB describes in detail how it exploits the poor

We must move from egocentric to ecocentric leadership to safeguard our planet

Step up action to protect the planet during wartime: UN environment chief

Drinking water: new plans to improve tap water quality and cut plastic litter

The Dead Sea is drying up, and these two countries have a plan to save it

Coronavirus: Commission presents practical guidance on implementing the temporary restriction on non-essential travel to the EU

A third of world’s out-of-school youth live in conflict, disaster-affected countries: UNICEF report

Brexit: MEPs concerned about citizens’ rights

7 top things to know about coronavirus today

These are the countries best prepared for health emergencies

Countries must up their game to reduce low birth weights, warns UN-backed report

EU to present a “hefty” exit bill to the UK moments before Brexit negotiations

Further reforms will move Slovakia toward a more innovative and inclusive society

Eurozone has practically entered a deflation trap

Youth Forum welcomes European Commission proposal to speed up financing for youth employment

3 ways AI will change the nature of cyber attacks

Presentation of Juncker’s Investment Plan: Can 315 billion euros save the EU?

The increasing drug prices in Europe

Transparency and tech together can safeguard taxpayers’ money

May a parody constitute a copyright infringement? European Court of Justice to give the answer

UN chief welcomes South Sudan’s Unity government, lauds parties for ‘significant achievement’

UN chief encouraged by release of Cameroon opposition leader

EU seems to fail its moderate migration promises postponing them for end 2015

Here’s how India became a global clean energy powerhouse

An Eastern Wind

Why banks escape from competition rules but not pharmaceutical firms

The EU banking union needs a third pillar guaranteeing deposits

Why will Paris upcoming “loose” climate change agreement work better than the previous ones?

Reform of road use charges to spur cleaner transport and ensure fairness

How a possible EU budget deficit affects the migration crisis

2013, a Political Odyssey: What future for Italy?

7 ways to break the fast fashion habit – and save the planet

Deliver ‘significant results now’, UN General Assembly President tells COP25 climate conference

MEPs want to ensure sufficient funding for Connecting Europe’s future

Road safety: Data show improvements in 2018 but further concrete and swift actions are needed

‘Informing is not a crime’ UN chief calls for better protection of journalists, press freedom

A Sting Exclusive: “Regional Policy: a fully-fledged investment policy”, Commissioner Cretu reveals live from European Business Summit 2015

Macron leads EU-wide minimum wage call as Merkel, Medvedev warn of global injustice

COP21 Breaking News_05 December: Ban Ki-Moon Closing Address at COP21 Action Day Innovation, Imagination, Faster Climate Action

These islands are using tourists to help offset the effects of tourism

A renewed agenda for Research and Innovation: Europe’s chance to shape the future

Greece bailout ends but with no substantial effect on citizens’ life

Nothing about us without us: how youth empowerment creates lasting change in the climate meltdown

EU Directive makes haircut on uncovered deposits a standard in bank bail-ins

Huge data gaps’ hampering ‘evidence-based’ national migration policies

Earthquake: Monte Dei Paschi Di Siena

‘We face a global emergency’ over oceans: UN chief sounds the alarm at G7 Summit event

EU voters not interested in the European Parliament elections. What’s behind this European Titanic?

‘Negative developments’ undermining two-State solution in Middle East

How dearly will Germany pay for the Volkswagen emissions rigging scandal

Banking Union: ECOFIN and Parliament ready to compromise

EU and Japan agree on free-trade deal and fill the post-TPP void

Australia wants to build a giant underground ‘battery’ to help power the nation

UN chief condemns deadly attacks in Pakistan

Why cyber-risk should take centre stage in financial services

‘Still time’ to stop a ‘bloody battle’ for Libya’s capital, insists Guterres

Tax reforms accelerating with push to lower corporate tax rates

How climate change exacerbates the refugee crisis – and what can be done about it

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s