In the early days of the Internet, people could browse the web and access information anonymously, visiting any website without needing to create an account or provide any personal information. However, the evolution of the Internet has made it increasingly difficult to remain anonymous.
Big companies like Facebook and Google have built their businesses around collecting data about their users and selling it to advertisers. Check out the Blockchain Value Season 1, Episode 1 Podcast Enterprise Blockchain – Is Your Business Missing? with Adrian Garcia.
In recent years, growing concerns about online privacy have led to the development of new technologies (such as blockchain) that provide a higher level of privacy. Interest in blockchain continues to grow among the growing number of privacy-conscious individuals.
1. The EU GDPR and the drafting of the EU Privacy Regulation
The European Union is a leader in online privacy protection. In 2018, the EU implemented the General Data Protection Regulation (GDPR), which requires companies to obtain explicit consent from users before collecting, using or sharing their data. Companies that violate the GDPR can be fined up to 4% of their annual turnover.
So far, the GDPR has been somewhat successful in protecting EU citizens’ online privacy. The EU is currently working on a new regulation called the ePrivacy Regulation.
The ePrivacy Regulation will complement the GDPR, providing additional protections for electronic communications.
2. American trends and the CCPA
While the United States has been slower to pass laws protecting online privacy, that is starting to change. In 2018, California passed the California Consumer Privacy Act (CCPA), requiring companies to disclose the personal information they collect and giving consumers the right to delete their data.
The CCPA does not specifically mention blockchain, but the law applies to companies that use blockchain technology. For example, a company that uses blockchain to store customer data should disclose it to customers; customers would also have the right to request that their data be removed from the blockchain.
The CCPA is just one example of a trend toward greater privacy protection in the United States. Other states are passing (or considering) similar laws in the future.
3. Applicability of the law on anonymity, pseudonym and confidentiality
Anonymity is, quite simply, the state of being anonymous. An anonymous person does not share their name or any other identifying information. Pseudonym describes the act of using a pseudonym (a false name that can be used to protect someone’s identity).
Privacy laws such as GDPR and CCPA only apply to individuals who can be identified. This means that anonymity and pseudonymity can be used to circumvent these laws.
In fact, anonymity is one of the main reasons people use blockchain because it allows people to transact without revealing their identity. This means that blockchain can be used to circumvent privacy laws.
However, there are certain situations where privacy laws still apply to blockchain transactions. For example, if a person uses their real name when signing up for a blockchain-based service, then their real name will be stored on the blockchain. This means that privacy laws will still apply to that person.
4. Identification of the controller and processor
Data controllers are responsible for ensuring that personal data is collected and used in accordance with the law. Data processors are responsible for processing personal data on behalf of data controllers. The GDPR and the ePrivacy Regulation apply to both controllers and processors.
5. Location, location, location… and more
Although the GDPR and ePrivacy Regulation only apply to companies based in the EU, they will also apply to companies that process the personal data of EU citizens. This means that companies based in the United States but which collect or use the personal data of EU citizens will have to comply with both the GDPR and the ePrivacy Regulation.
Conclusion
Blockchain and privacy are two very important topics. Businesses and their advisors should be aware of these issues when collecting or using personal data on the blockchain.
Olga V. Mack is the CEO of Talk Pro, a next-generation contract management company that pioneered online trading technology. Olga embraces legal innovation and has dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup consultant, speaker, adjunct professor, and entrepreneur. She founded the Women sit on boards movement that advocates for women to sit on the boards of Fortune 500 companies. She wrote Come on board: win your ticket to a seat on the board of directors and Fundamentals of smart contract security. You can follow Olga on Twitter @olgavmack.
