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Hybrid Blockchain and GDPR

20.03.2022

At first glance, Blockchain and GDPR can’t even be used in one sentence as they seemingly are conflicting terms. However, we dare to disagree as they can co-exist in the world of hybrid blockchain technology.

What is the conflict, and how does the hybrid blockchain technology settle it?

 

What is GDPR?

Considered the strictest privacy and security law in the world, the General Data Protection Regulation (GDPR) was adopted by the European Union (EU) in April 2016. Even though it was drafted and passed by the EU, the GDPR imposes obligations onto organizations worldwide – should they target and/or collect data related to people in the EU.

The GDPR signals Europe’s firm stance on data privacy and security as more and more people are entrusting their personal data with cloud services, whereas data breaches and leaks occur on an almost daily basis. This leads to personal information – anything from email addresses to social security numbers – being exposed.

What is personal data exactly? According to the GDPR, personal data includes “any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.”

 

GDPR vs. Blockchain

Essentially, the GDPR empowers people to be in control of their personal data and how it is used. Put differently, the Regulation empowers adjustability of data.

Contrary to this, blockchain technology is known for its immutable nature. As a result, altering or deleting any data stored on the chain is anything from extremely difficult to impossible.

However, hybrid blockchains may be the answer. How does this technology take us from blockchain vs. GDPR to hybrid blockchain and GDPR?

 

Hybrid Blockchain as a Solution

As we have learned, to comply with the GDPR, no personal data should be put on the blockchain due to its immutability (i.e., it’s impossible to manipulate data that has been put on the chain). But is there a way for blockchain technology to still meet the GDPR requirements? The answer is yes.

Hashing is a crucial feature of hybrid blockchain technology. A cryptographic hash represents digital fingerprints of a certain amount of data. In simpler terms, it is the digital evidence of the actual data.

Several hashing algorithms can be used together, but some cryptographic hashes are more common than others. Hash values are unique; therefore, should any data be altered, the respective hash value would immediately change as well.

 

Example of GDPR-Compliant Hybrid Blockchain

The LTO Network is a hybrid blockchain focusing on decentralized identities (DIDs) and verifiable credentials (VCs). It is the first blockchain to become compliant with privacy and GDPR regulations.

The LTO Network has a feature called Live Contracts – a digitized procedure that predefines all the possible actions for each network participant. The data is only made available and can only be used for specific actions within the procedure.

So, every Live Contract creates a miniature private blockchain. As a result, the Live Contracts feature already sets the ground for meeting the GDPR requirements.

 

Coinmetro Supports the LTO Network

Coinmetro has recently listed LTO and is currently supporting LTO ERC20 V2.

If you are ready to start trading, don’t wait to sign up with Coinmetro! If you are an existing user, you can head over to the exchange now!