New EU Privacy Law Threatens Blockchain

The European Union has been making quite a name for itself as of late for going up against tech giants for their manipulative activities. It fined Google $2.7 billion in June 2017 for manipulating search results that favored some news sources over others and is currently investigating Facebook for the Cambridge Analytica scandal. It is for these reasons that the EU is planning to pass laws that strictly protect people’s data, and that’s where it is in conflict with Blockchain.

The EU privacy law, known as the General Data Protection Regulation, states that ordinary citizens could demand that data about them be deleted off the internet under many circumstances. Of course this law would include exceptions for criminals, public officials under investigation etc.

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However, Blockchain technology is built on the foundation of unchanged information. The universal ledger of Bitcoin or Ethereum requires that all information, once logged onto it, stays to ensure decentralized control. This information is shared on multiple ledgers making it virtually impossible for someone to corrupt the data on all nodes.

The EU law challenges this basic tenet. If the ability to change something on Blockchain is enforced, that makes the cryptocurrency in question less secure. Private Blockchains maybe open to this kind of control. Microsoft, IBM and VISA are all shifting to Blockchain as their primary system for data transfer. They can be forced to alter their ledgers and go on a ‘fork’, using a slightly edited chain.

Public blockchains are a different story. Altering the ledger would almost certainly result in a devaluation of the currency in question as well as a blow to investor confidence.

This debate is a pertinent one to have due to the recent revelation that 1.4% of the Bitcoin Blockchain is infested with files containing child pornography.

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