This article is written by Prateek Mudgal, Faculty of Law, Aligarh Muslim University. The article deals with blockchain in detail. I have tried to keep the language simple so that technical terms don’t confuse the readers. Apart from this, I have explained how blockchain works and why the issue of privacy arises.
There is an undeniable hype surrounding blockchain and I know many must be unfamiliar with the term. Therefore, to make sure that you have an idea about the same: the famous bitcoin is an example of blockchain, a kind of cryptocurrency. The hype surrounding the blockchain is neither unnecessary nor is overhyped. It can be considered as a revolution in computer technology which will facilitate several tasks. Like other developments, blockchain too has certain drawbacks and concerns, one being ‘Right to be forgotten’. In this article, I will tell you everything about blockchain and ‘Right to be Forgotten’.
What is Blockchain
Blockchain is a very effective technology that allows the data to be shared without letting it get copied, blockchain surely is a revolution in the world of the internet.
Blockchain is actually a time-spaced and immutable data, that is it cannot be changed. The data is connected to a number of computers called nodes and is not owned by a single entity.
Each packet of data is called a block, and all these blocks are connected to each other like a chain with special cryptographic principles, therefore is called block-chain. Since there is no central authority, and the immutable data is stored on the internet there is a lot of transparency and anyone can see and access that data. Apart from this, it increases the accountability of every individual who uses the data.
Transaction Cost in Blockchain
One of the most cost-friendly features of blockchain is that there is no transaction cost involved in the blockchain. Blockchain is a simple and efficient way of sending information. Once a transaction is initiated a block is created, and that block is verified thousands or perhaps lacs of computers present on the internet, once verified transaction is completed and the verified block is added to the chain. The transaction is stored as a unique record with a unique history.
Whenever a transaction takes place, a transaction cost is processed, but since here, the block is already verified by various computers present on the internet, the transaction cost is not required. Therefore, it is a great method to remove the processing fee of the transaction. Bitcoin uses a similar mechanism.
Reasons behind the popularity of Blockchain
- Since there is no single owner of blockchain, there is no central authority also, and therefore it is decentralised.
- The data stored in the blockchain is secured since it is cryptographically stored and linked with the chain.
- Immutability of blockchain negates the risk of data being tampered since the data stored in the blockchain cannot be changed.
- Transparency of blockchain, allows anyone to see what is stored, this will help in increasing the accountability of various business companies because their each and every transaction will be visible.
Working of a blockchain
Blockchain is actually used by a very distributed network of systems, which verify anything uploaded as the block. Since, a million of computers spread over the computer verify the block before being added to the chain, a need of third-party such as a bank is removed and the transaction is completed without the requirement of any third-party.
Since, the blocks are connected to each other by a cryptographic hash function that binds them to the chain, therefore changing a block becomes impossible because any change would break the consistency of chain itself and therefore the blockchain becomes immutable. Apart from immutability, it also makes the tracing and auditing of blockchain possible, which is very essential for large networks.
Pillars of a blockchain
Development bitcoin added the democratic effect on the internet and the way how information is shared. Before bitcoin or Bittorrent, there used to be the single entity that used to store the required, therefore there was one central authority. Every other individual, who required the data had to interact with this sole authority and from the centralised authority, they used to get the data. A bank is a good example of such a central authority system, where a bank stores all the money and customers interact with this sole authority. It is very similar to the Server-Client Model. But how will decentralisation be useful? Let us see the merits of a decentralised system, which are absent in a centralised system.
Merits of Decentralisation
- When data is centralised, it is the perfect target for hackers, and potential hackers may take advantage of the same, whereas in decentralisation such a problem does not arise.
- Periodically, the systems have to undergo through various updates, during such updates, if the system is centralised then all other dependent systems have to halt as well, but when decentralised such problem is solved, similarly if any technical issue arises with the central system, other systems would also have to stop their work. Human error will affect others as well.
- If anything malicious or harmful like a virus attacks the central system, then there is always a fear of the spread of such a virus to other systems.
Transparency is one of the chief benefits of blockchain, but it is also one of the most misunderstood features of blockchain.
A few find Blockchain really transparent whereas some find it not transparent at all. I will try to put forth reasons why blockchain is very transparent in an opaque manner.
What I mean by transparency in an opaque manner is, blockchain represents personal data using the public address which makes it impossible to trace the personal identity of the user.
For instance, if I say ‘X transacts 1 BTC to Y’ then in the blockchain it would appear something like ‘10ojefoeknnffnnxnxmnodjrjeroipowpdkknmnmnjd sent 1 BTC to 9903jjdnsxnxxxhddjhxhxijxoijoixhhxohjxjpojdoxhuhdohdohspa’. This is how the transaction would be recorded.
Now in this form, the transaction will be recorded and anyone will be able to see the transaction. Now in the transaction who sent it to whom will be changed and the individual will be able to look only at the public address.
This is how blockchain protects transparency in an opaque manner. Such transparency is actually revolutionary in the financial system, this level of transparency is not seen elsewhere. There it adds to the popularity of blockchain.
Another important pillar of blockchain is immutability. This means that once data is added to the blockchain it is not possible to change the stored data on the blockchain. This also creates a problem which I have discussed in the next section under the head ‘Right to be Forgotten and Privacy issues, but now I will discuss certain plus points of this allowed immutability.
Immutability stops any kind of tampering which might be done with the data, therefore it prevents data from being tampered’. Thinking at a larger scale it can be really helpful as various embezzlement cases can be prevented just because no would be able to tamper the company’s account.
It is a property of blockchain, let us find out what does this Avalanche effect actually mean? Whenever a small change is made in the input of the blockchain the change in hash or output is very huge.
Reasons behind Immutability:
The main reason behind the immutability of data is the use of a cryptographic hash function. Defining in a very simple way, hashing means no matter how long the input string of data is the output string will always be of a fixed length. Since blockchain is actually a cryptographic hash function, blocks are data and hash pointer points to the previous block(data) in the chain. This is how data is linked in the blockchain. Now, for instance, a hacker tries to change the data of block 4, this because of the property of hash functions a very small change in data will lead to a huge change in the hash itself, which means that change in data of block 4 will affect the hash pointer of block 3, and following the above explanation, the chain will become inconsistent just because of a single chain. Therefore a change in the block will make the blockchain inconsistent.
Right to be Forgotten and privacy issues
European Union in its legislation of GDPR has created serious legal backlashes and legal issues regarding blockchains. Let me elaborate on what I mean by this.
The General Data Protection Regulation (GDPR), this requires various companies to allow the people to delete their personal data once the task for which data was required is completed. Allowing so, people are legally entitled to delete the stored data once the objective of data storage is completed.
But as we know that blockchain is immutable and blocks cannot be changed, therefore users cannot mutate, delete or change the data already stored, this creates a legal issue relating to the use of blockchain.
Risk of Privacy
In this world of technology, we are surrounded by smart appliances running on artificial intelligence. These smart appliances work to make our life easy. But how do they do it? They collect behavioral data and lifestyle data and accordingly help with reminders and other special features. It will be more clear with the help of an example. For instance, you have a home insurance policy and to acquire lower premiums, you have allowed your security sensor, to let its data stored on a blockchain. Such stored data ensures data transparency, thus allowing authorities like the police or insurance providers to access the data and audit the security data and home alarm.
Now once your policy expires, surely you would like to delete your stored data on the blockchain, as it is very clear the purpose for which the data was stored on the blockchain has been completed, therefore data is no more required. If data is left on the blockchain, it creates several issues one being that any entity can access the data on the blockchain, which increases the risk of identification through data present on the blockchain, apart from this there can be additional tracking of activities.
It is evident that blockchain stores data anonymously and it is not possible to know the user’s identity through data stored in the blockchain. But still, there is a risk if any user knowingly or unknowingly links their data stored on the blockchain with any personal data, then in such cases, it becomes such personal information can be known and other user data can also be traced back to the user, thus endangering the privacy of the user.
The solution to incorporate ‘Right to be Forgotten’ is only through a blockchain model that allows the user to delete unnecessary data without damaging the consistency of blockchain. To incorporate this it becomes clear that we have to tamper with one of the pillars of blockchain technology that is immutability.
Various models are there which claim to allow changes in the data with no effect on blockchain consistency. Such a possibility will avail the users with ‘Right to be Forgotten’ and apart from this, it will also help to save storage space on the server.
Such models will be beneficial since they will allow remaining hash as it is, and such can be re-verified by authorities or the owner itself.
It is therefore beneficial, as it allows to review and edit the data but also leaves room for future audit.
Blockchain is one of the revolutionary changes in the internet world, it will drastically change our view of how data is stored. When Bitcoin as a cryptocurrency was first introduced the scepticism regarding bitcoin could be felt in every discussion. Surely we humans are afraid of new things, but I would not mention the same as something negative, after all, fear of something new is a survival instinct. Blockchain is going to revolutionise everything, but again it is also important to make blockchain more accessible and legit in its use. Right to be forgotten is one such right and blockchain has to cater to the needs of users, and then blockchain would be able to fulfil the motive with which it was created.
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