Crypto Group Claims Blockchain Should be Exempt From EU Data Protection Rules

By Tom Pritchard on at

On 25th May the EU's General Data Protection Regulation (GDPR) comes into effect, and with it tech companies are going to have to make sweeping changes to how they handle user data and granting users more control over what information is stored. One Washington DC-based think tank thinks Bitcoin and the rest of the blockchain should be exempt from those rules, however.

Coin Center says that because blockchain can be used to store personal data, it would likely wall under the jurisdiction of GDPR rules. Under those rules companies that store data on EU citizens will have to comply should those citizens ask for their personal data to be deleted. Unfortunately experts told The Verge that this might be totally incompatible with the way blockchain works, since modifying or deleting any stored data has consequences on the rest of the blocks in the chain.

Andries Van Humbeeck, co-founder and blockchain consultant at TheLedger.be, spoke to The Verge, “If you purge a block of transactions, the truthfulness of all subsequent blocks of transactions becomes questionable", adding, "all Bitcoin transactions after that purged block become untrustworthy, which would undermine the complete system."

Blockchain transactions, used by cryptocurrencies and a growing number of other industries, are designed to permanently record transaction details, so the core basics of the tech are theoretically incompatible with the GDPR in its current form. Then again the GDPR was signed into law two years ago, back when cryptocurrency was still a niche thing and very few people knew what blockchain was. That's why Coin Center is calling on the EU to recognise the two are fundamentally incompatible at the moment, and asking for an exemption.

At this point one of two things can happen. Either blockchain developers find a way to fully anonymise the data held within the chain itself, and thus ensuring it doesn't fall under the jurisdiction of GDPR rules, or the EU decides that blockchain doesn't have to delete personal data the same way Facebook or Google might. If neither of these things happens, Coin Center warns that it will have a detrimental impact on the development of blockchain technology within the EU, which, as we've seen already, holds a lot of promise beyond the world of digital money. [The Verge]


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