Risks of Blockchain for Data Protection: a European Approach

Resumen

Blockchain has come to revolutionize commerce, driving faster andmore efficient transactions. This new technology was born to work in atrustless environment, without any need for trusted intermediaries orsupervision by state agencies, leaving a digital print that is mostly publicand permanent. Nonetheless, the main problem it presents is that the use ofblockchain can interfere with an individual’s privacy rights. This articleexplores the challenges posed by blockchain to data protection. Looking intothe characteristics of blockchain will be necessary to explore its advantagesand limits, especially from a privacy point of view. Blockchain is a kind oftechnology that is currently disruptive, but its applications can be modulatedand configured in different ways depending on the needs. This articleexamines the territorial and material scope of the General Data ProtectionRegulation in order to clarify whether it is applicable to blockchaintechnologies. The issue of identifiers on a blockchain, the allocation ofresponsibility to participants, the tension with data subjects’ rights and, inparticular, the right to erasure are discussed. Some recommendations forreconciling data protection and blockchain technologies are proposed, inparticular, projecting the privacy by design principle to blockchainapplications. Technological developments should not suppose adeterioration of the rights of individuals. However, some technical solutionsentail significant trade-offs, as the case on anonymity in cryptocurrenciesillustrates.