GDPR: A Game Changer Is Coming for Cryptocurrency
The EU has finally come out with an approved framework for how corporations should handle user data. Although this are quite good news for people generally, I can also see it as a massive blow for so many altcoins.
Trust me when I say there is an enormous storm coming.
GDPR – What’s Important to Retain
There are many important rules companies must follow starting from June 2018, that will actively protect customers against corporations data theft and abuse (ie, selling your data without your consent or creating complicated terms and agreements most users do not fully understand). I advise you to read through the whole thing especially if you (like me) work in IT, are responsible for an IT department or have your own startup; but there’s one single point I believe to be most destructive for many cryptocurrencies:
Yes indeed, each user has the right to be forgotten, meaning, all user data should be able to get permanently deleted. Let’s say if I chose to delete my facebook account, anything I have ever posted, commented, liked, etc has to disappear. It does seem simple when you own your own infrastructure, but due to one of the most important properties of blockchain technology being its immutability, you can already see the problem bubbling up.
Any platform that uses a distributed ledger to store user data (blockchain, ethereum) is, by all means, screwed. There is absolutely no way around this. What if companies just ignore this new enforcement? Well, the fine is only 4% of your company’s revenue, up to 20 Million Euros.
So if you have invested in a project, own a project or are generally interested in better understanding how this market will evolve, please do pay attention to the following: storing any user data on any public distributed ledger is half-way to a really, really, really unpleasantly expensive outcome.
From the top 100 cryptocurrencies, how many can you identify that will face issues due to this new regulation? Platforms that hold user data in any form must assure there is a way for that data to be deleted. Let me underline this again: it means a big no-no to storing any user data on a ledger from where that data cannot be deleted.
What about other rules?
Other key changes can be followed without compromising the concept of immutable distributed ledger technology. If you want more information on the subject I highly advise you to read this article. All these points are explained brilliantly by the author. If you want a more in-depth understanding of how this problem could be avoided see this one. In short, you would have to consider off-chain storing of data; this is, centralized servers.
Raise awareness, speak to members of projects where you’re heavily invested and try to read as much as possible on the subject. Learning is the only way you’ll ever feel safe. Your opinion is the one you should value the most, as there is no one who will look-out better for yourself than… well, yourself!
Featured image from Shutterstock.