Blockchain technology has the potential to revolutionise many industries; it has been said that “blockchain will do to the financial system what the internet did to media”. Its most famous use is its role as the architecture of the cryptocurrency Bitcoin, however it has many other potential uses in the financial sector, for instance in trading, clearing and settlement, as well as various middle- and back-office functions. Its transformative capability also extends far beyond the financial sector, including in smart contracts and the storage of health records to name just a few.
A blockchain is a shared immutable digital ledger that records transactions / documents / information in a block which is then added to a chain of other blocks on a de-centralised network. Blockchain technology operates through a peer network, where transactions must be verified by participants before they can be added to the chain.
Notwithstanding its tremendous capabilities, in order for the technology to unfold its full potential there needs to be careful consideration as to how the technology can comply with new European privacy legislation, namely the General Data Protection Regulation (the “GDPR”) which came into force on 25 May 2018. This article explores some of the possible or “perceived” challenges blockchain technology faces when it comes to compliance with the GDPR.