Researchers from the University of South Australia have concluded that blockchain technology needs to be improved to improve user privacy.
Research results described in the article
a blog post by the University of South Australia shows that the features that make the blockchain secure carry problems for user privacy, especially in accordance with the new European standards.
The study was conducted by emerging technology researcher Dr Kirsten Wahlstrom in collaboration with Dr Anwaar Ulhaq and Professor Oliver Burmeister from Charles Sturt University.
A team of researchers has discovered that new technologies, such as blockchain and the Internet of things, can compromise people’s privacy because they are immutable and store data. This is because blockchains use details of previous transactions, including data that can be used to identify participants, to verify future transactions.
“When someone’s data gets into the blockchain, the system never forgets it,” Wallstrom said. “Yes, this data can be encrypted, but it is also part of an immutable registry that is stored in the cloud.”
The document mentions recent legal changes in EU law, meaning that citizens have a “right to be forgotten” in relation to their data posted on the Internet. Thus, as long as the blockchain exists, the technology contradicts the European regulation, according to which people have the right to revoke their data, Wallstrom said.
In August, the electronic Frontier Foundation (EFF), a non-profit organization, expressed similar concerns about a proposed law in California allowing medical records to be stored on the blockchain.
“Standards need to be fixed now to clearly distinguish between the concept of privacy, and what governments and organizations are trying to protect and why,” Wallstrom said. “The main problem is that we are still trying to understand what privacy really means in the online world.”
According to the study, Holochain is an example of a technology that can solve the problem of privacy. The project uses distributed hash tables, a form of distributed database that can record key-related data in a p2p network of nodes, and avoids the need to create a comprehensive “registry” of the blockchain.
“This allows people to verify data without revealing all its details or storing it permanently in the cloud,” Wallstrom said. “But there are still many questions about how this affects the long-term viability of the chain and how it gets confirmed.”
Many projects in the blockchain industry are implementing solutions to improve privacy. Secret Network recently announced that it will roll out “secret contracts” on its blockchain on September 15. These smart contracts allow you to use confidential data in dApps without disclosing the original information.