Evaluating and delivering on-chain and off-chain privacy solutions and protocols
Despite common misconceptions, blockchain technology does not provide confidentiality and privacy, exactly the opposite is true. Blockchain is designed to be transparent. The focus on integrity of data in the decentralized model requires all the consensus participants to share information. Anything recorded onto a blockchain can be arbitrarily read without any restrictions by all participants. This places the new technology at odds with the new and onerous privacy and data protection regulations that all assume centralized controller-based data processing. Regulatory guidance on reconciling this and other potential conflicts is currently limited.
If you need information recorded in a blockchain to be confidential, this could be accomplished through the use of encryption, by anonymizing or minimizing information to be stored, and through other similar approaches.
Paralleling blockchain technology’s growth over the past decade, data privacy has seen a sharp uptick in global attention as a general policy and regulatory concern.
Organizations leveraging distributed ledger / blockchain / web3 technologies to collect, use or disclose personal information must take care to remain informed and compliant to requirements under relevant privacy laws and privacy and data protection expectations of their clients. Handling data privacy issues and properly applying laws increasingly contribute to a venture’s success or failure. For more information on how to respond to the privacy challenges imposed by the technical realities of decentralization technologies, contact us.
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