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Blockchain to solve growing privacy challenges

Blockchain for data privacy

Most things we do online are now public. Businesses collect, store, and use our personal data to develop their marketing models and improve sales & services.

In 2014, Uber faced major allegations as the company’s executives and employees spied on their customer’s movements, using tools such as a map. In another incident, cybersecurity experts have raised red flags over the use of ‘FaceApp’. The app was built by a small company in Russia, and according to their terms, the photos can be used in unexpected ways. The Cambridge Analytica scandal has also revealed serious issues with our data privacy. The whole incident posed questions regarding how governments and companies should deal with the data entrusted to them. Advanced technologies and practices also make it easier to link back the data to respective individuals.

Consequently, countries and regulatory authorities have taken steps to deal with user data privacy and data protection. The European Union (EU) has introduced the General Data Protection Regulation (GDPR) to address data privacy issues. The regulation has set rules of how a business can collect and process user data. India’s Data Protection Bill and General Data Protection Law in Brazil have also been introduced on the same lines.

Despite the impact these regulations have made on data practices, a lot of distance is yet to cover.

The Blockchain solution

Blockchain can offer a potential solution to address growing data privacy issues. The technology provides security and anonymity to enable protection of our personal information. A key aspect of privacy in the blockchain is the use of random strings of numbers called public and private keys. These keys are used to identify a person in a transaction without needing to reveal the identity. This presents potential opportunities for blockchain to ensure data privacy and security. Let’s have a closer look.

Financial transactions

When sending money to someone online, we have to rely on third-party services such as PayPal or Google Pay to complete the payment. Using blockchain can reduce the need to trust third parties to conduct a transaction. Users can make payments using their public and private keys in a peer-to-peer fashion, without having to provide personal information to a third-party application. Blockchain will also come with added security to the financial data.

Healthcare data

Blockchain technology can offer better control to patients over their healthcare data. They can store their healthcare data on the blockchain. Once the data is recorded on the ledger, patients can keep the information secure and accessible to only the required authorities. They can also only release a particular part of the information to the healthcare provider for purposes needed.

The major challenge

We have tried to identify how blockchain can be a potential solution to the growing data privacy issues. However, there is a significant issue with the use of blockchain in addressing privacy issues. Blockchain is not suitable for data privacy by design. The data will be stored on a ‘distributed’ ledger which can be seen by anyone of the network. Another issue is the fact that blockchain is immutable. Once the data is recorded on the ledger, it cannot be modified or deleted. It will make it impossible for a user to remove his personal data from the ledger even if he wants to.

The Enigma Project by MIT aims to solve this challenge. The team at Enigma has developed ‘Secret Network’ that allows nodes to process data without even seeing it. Secret Network is a privacy-first blockchain-based protocol that decentralized applications to utilize encrypted data without revealing it.

Another startup, Oasis Labs, aims to address data privacy issues with the help of blockchain. They are developing a system which can be used by organizations to assure their customer’s data privacy. You can read more about the company here.


Blockchain technology is already being used in various domains. Several governments have adopted blockchain to eliminate the need for centralized servers and boost data security. As we live in this information age, it has become increasingly important for us to keep our data safe and protected. How blockchain can help us in the matter is yet to be seen as the world explores the technology which is still in its nascent stage.



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Yogesh Rawal

Yogesh Rawal


Working as a content writer for more than 4 years. Based in Rajasthan (India).