Understanding Blockchain and Privacy in 2022
In the early days of the internet, people could surf the web and access information anonymously, visiting any website without having to create an account or provide personal information. However, the development of the Internet has made it increasingly difficult to remain anonymous.
Large companies such as Facebook and Google have built their businesses around collecting data about users and selling it to advertisers. Check out Blockchain Value Season 1 Episode 1 Podcast Enterprise Blockchain — Is Your Business Missing Out? with Adrienne Garcia.
In recent years, growing concerns about online privacy have led to the development of new technologies (such as blockchain) that offer a higher level of privacy. Interest in blockchain continues to grow among the growing number of privacy-conscious individuals.
1. The EU’s GDPR and the design of the EU regulation on personal data protection
The European Union has been a leader in online privacy. In 2018, the EU implemented the General Data Protection Regulation (GDPR), which requires companies to obtain explicit consent from users before collecting, using or sharing their data. Companies that violate the GDPR can be fined up to 4% of their annual revenue.
So far, GDPR has been somewhat successful in protecting the privacy of EU citizens online. The EU is currently working on a new regulation called the ePrivacy Regulation.
The ePrivacy Regulation will supplement the GDPR, and provide additional protection for electronic communications.
2. US trends and the CCPA
While the United States has been slow to pass laws protecting online privacy, this is beginning to change. In 2018, California passed the California Consumer Privacy Act (CCPA), which requires companies to disclose what personal information they collect and gives consumers the right to delete their data.
The CCPA does not mention blockchain specifically, but the law applies to companies that use blockchain technology. For example, a company that uses blockchain to store customer data will have to disclose it to customers; customers will also have the right to request that their data be deleted from the blockchain.
The CCPA is just one example of a trend toward increased privacy in the United States. Other states are in the process of passing (or considering) similar laws in the future.
3. Anonymity, pseudonymity and privacy legislation
Anonymity is simply the state of being anonymous. An anonymous person does not share their name or other identifying information. Pseudonymity describes the act of using a pseudonym (a false name that can be used to protect someone’s identity).
Privacy laws such as GDPR and CCPA only apply to identifiable individuals. This means that anonymity and pseudonymity can be used to avoid these laws.
In fact, anonymity is one of the main reasons people use blockchain, as it allows people to transact without revealing their identity. This means that blockchain can be used to circumvent privacy laws.
However, there are some situations where privacy laws still apply to blockchain transactions. For example, if a person uses their real name when signing up for a blockchain-based service, their real name will be stored on the blockchain. This means that privacy legislation will still apply to this person.
4. Identification of data controller and data processor
Data controllers are responsible for ensuring that personal data is collected and used in accordance with the law. Data processors are responsible for processing personal data on behalf of data controllers. The GDPR and the ePrivacy Regulation apply to both data controllers and data processors.
5. Location, location, location… And so on
While GDPR and the ePrivacy Regulation only apply to companies based in the EU, they will also apply to companies that process personal data of EU citizens. This means that companies that are based in the US but collect or use the personal data of EU citizens must comply with both the GDPR and the ePrivacy Regulation.
Conclusion
Blockchain and privacy are two very important topics. Companies and their advisors must be aware of these issues when collecting or using personal data on the blockchain.
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the law of the future. She is convinced that the legal profession will appear even stronger, more robust and more inclusive than before by embracing technology. Olga is also an award-winning general consultant, operations expert, start-up consultant, public speaker, assistant professor and entrepreneur. She founded Women serve on boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. She authored Get on board: Get your ticket to a corporate seat and Basics of Smart Contract Security. You can follow Olga on Twitter @olgavmack.
