Australian University Finds Privacy Issues With Blockchain Technology

A research paper from the University of South Australia suggests blockchain technology needs to be refined so it can better protect privacy.

• Described in a university blog post on Thursday, the research findings show the very features that make blockchain secure are also problematic for personal privacy, particularly under European standards.
• The work was conducted by emerging technologies doctoral researcher Kirsten Wahlstrom in collaboration with Anwaar Ulhaq and Oliver Burmeister of Charles Sturt University, also in Australia.
• The team found emerging technologies such as blockchain and the internet of things possess the potential to compromise people’s privacy in the way they immutably store data.
• That's because blockchains use 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 never forgets," Wahlstrom said. "Yes, those details might be encrypted, but they are also part of an irreversible ledger, and one that’s on the cloud."
• The paper references recent legal developments in the European Union meaning citizens possess the "right to be forgotten" in relation to their internet-hosted data.
• So, as long as a blockchain exists it conflicts with the European ruling that people have the right to retract their data, Wahlstrom said.   
• In August, digital rights group the Electronic Frontier Foundation raised similar concerns over a proposed California law allowing medical records to be stored on a blockchain.
• Standards need to be cemented now in order develop a clear distinction on what privacy is, as well as what governments and organizations are trying to protect and why, Wahlstrom noted.
• "The main problem is, we’re still struggling to understand what 'privacy' actually means in an online world," she added.
• The research cited Holochain as an example of technology that might address the privacy issue.
• The project uses distributed hash tables, a form of a 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 individuals to verify data without disclosing all its details or permanently storing it in the cloud," Wahlstrom said, "but there are also still a lot of questions to answer about how this affects the long-term viability of the chain and how it obtains verifications.”

See also: Blockchain Privacy Firm HOPR Releases Mixnet Hardware Node for Ethereum