An Australian university has found privacy concerns in Blockchain technology

An Australian university has found privacy issues in Blockchain technology - blockchain 730528330A research article from the University of South Australia suggests that blockchain technology needs to be refined so that it can better protect user privacy.

A delicate matter

Described in a recent post on the university's official website, the research results show that the same characteristics that make blockchain secure are also a concern for personal privacy, particularly according to a comparison with European standards.

The work was led by PhD candidate in emerging technologies Kirsten Wahlstrom in collaboration with Anwaar Ulhaq and Oliver Burmeister of Charles Sturt University, also in Australia.

The team found that emerging technologies such as blockchain and the Internet of Things have the potential to compromise people's privacy in the way they immutably store data.

This is because blockchains use the details of previous transactions, including data that can be used to identify participants, to verify future transactions.

“Once someone's details are embedded in a blockchain, the system will never forget them,” Wahlstrom explained. "Yes, those details may be encrypted, but they are still part of an irreversible registry, which is in the cloud."

Conflict with privacy laws

The document refers to recent legal developments in the European Union, which emphasize that citizens have the "right to be forgotten" in relation to their data stored on the Internet. Hence, the existence of a blockchain as it stands now conflicts with the European ruling that people have the right to withdraw their data when they wish, Wahlstrom said.

In August, the Electronic Frontier Foundation's digital rights advocacy group raised similar concerns about a California bill that allows medical records to be stored on a blockchain.

Standards need to be consolidated now in order to develop a clear distinction as to what privacy is and what governments and organizations are trying to protect and why, Wahlstrom noted. "The main problem is that we are still struggling to understand what 'privacy' actually means in an online world," he added.

Holochain's example

The research cited Holochain as an example of technology that could address the privacy problem. This design uses distributed hash tables, a form of distributed database that can record data associated with a key on a network of peer nodes, and avoids the all-encompassing "ledger" of a blockchain.

“This allows people to verify the data without disclosing all the details or storing it permanently in the cloud,” said Wahlstrom, “but there are still many questions to be answered about how this affects the long-term profitability of the chain and how how it acts for checks. "